Facebook and Reliance Jio should be transparent about the data being shared between them, experts said. If the $5.7-billion deal is approved, the two companies together will have a subscriber base that would give them a near-monopoly, touching most Indians using the internet.
Facebook’s messaging platform WhatsApp is used by two out of three smartphone users in India, while more than half of India’s over 600 million internet users access the social network every month. In less than four years, Reliance Jio has emerged as India’s biggest telecom service provider with 388 million subscribers. IDC estimates that over 450 million smartphones are used in India.
Apar Gupta of Internet Freedom Foundation (IFF) said that concerns on the deal emerge from the fact that the two entities may have access to each other’s data, which may impact competition.
Read: How Facebook is logging into the Reliance Jio ecosystem
“There may be benefits on data transfer, which may impact innovation, and therefore, sufficient regulatory scrutiny is needed to ensure that the conditions are made available to other third parties,” said Gupta.
“Because of the investment, there will be a close relationship between Jio and Facebook and high degree of comfort on exchange of user data, and the combination of Facebook’s dominance and Jio’s expansive network may not be available to other players,” he added.
Others say that the government needs to look into the data-sharing agreement between these two parties and it should be made transparent to both consumers and the government.
“The fears are that Facebook is a foreign company and there have been issues on how the data and information can be manipulated over its platforms,” Neil Shah – VP, research at Counterpoint Research said.
In 2019, Facebook faced a backlash from governments globally over harvesting of user data by Cambridge Analytica. The social network early this week said that it would apply for a payment licence with Swiss authorities for its Libra cryptocurrency, after its earlier attempt to launch a global cryptocurrency was aborted after concerns were raised by global banking regulators.
Facebook India MD Ajit Mohan dismissed such concerns. “Speaking on behalf of Facebook, there is no data sharing in this (deal),” he told ET.
Read: Reliance Jio says no preferential access to Facebook, WhatsApp
In India, Facebook has been in a standoff with the government over traceability of users on WhatsApp, after concerns over the platform being used to spread rumours. WhatsApp has responded by limiting the number of forwards, but has not given in to India’s request for diluting end-to-end encryption of the messaging platform.
Gupta of IFF said the deal’s biggest fallout will be on India’s innovation ecosystem.
“Large part of the internet ecosystem is driven by large-scale innovation done by the smaller companies and there could be a potential risk for that ecosystem,” he said.
Nikhil Pahwa, co-founder of savetheinternet.in campaign, which was instrumental in foiling Facebook’s Free Basics project in India, said that the challenges arising from the deal are in terms of competition where the company that has the largest social network and messaging app has bought a stake in the largest telecom operator in India.
“This gives immense market power and the government needs to ensure that this market power is not abused.”
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