Google has filed for an approval with the Competition Commission of India (CCI) for buying a 7.73% stake worth Rs. 33,737 crore into Jio Platforms as well as to jointly develop an entry-level affordable smartphone. Google has filed for approval through its wholly-owned subsidiary Google International LLC (GIL)."The notification is being filed in relation to GIL's proposed acquisition of...
Google has filed for an approval with the Competition Commission of India (CCI) for buying a 7.73% stake worth Rs. 33,737 crore into Jio Platforms as well as to jointly develop an entry-level affordable smartphone. Google has filed for approval through its wholly-owned subsidiary Google International LLC (GIL).
"The notification is being filed in relation to GIL's proposed acquisition of a minority non -controlling shareholding of around 7.73 of equity share capital in JPL (Proposed Investment)," the US major said in its filing.
"The Proposed Transaction comprises the acquisition by GIL of a minority non-controlling stake in JPL under Section 5(a) of the Competition Act, 2002. Simultaneously, certain affiliates of GIL executed a separate commercial agreement with JPL to collaborate on the development of a new low-cost smartphone (the Foundational Commercial Agreement/ FCA, or the Collaboration)," the filing said.
On July 15, Google became the 13th investor to announce that it would buy a 7.73% stake in Jio Platforms for Rs. 33,737 crore. This investment was a part of Jio Platforms over Rs. 1.52 lakh crore fund raising exercise by divesting minority stakes to multiple technology companies such as Qualcomm and Intel besides Facebook and Google, technology focussed private equity players and sovereign wealth funds.
Google and Jio have also entered a commercial agreement to jointly develop an entry-level affordable smartphone with optimizations to the Android operating system and the Play Store. The smartphone that could even support 5G at a later stage is targeted at the 350 million feature phone users in India. "The Proposed Investment and the Collaboration are together referred to as the 'Transaction' ".
Under the header 'The respective markets in which the Parties to the Transaction operate', Google said that the deal enables Google and Jio Platforms to develop and launch a new smartphone in India.
According to the filing, "The Parties, thus, consider that the only relevant market for assessing the horizontal competitive effects of the Transaction is the market for the supply of mobile phones in India. Outside this Transaction, Google and JPL will continue to conduct their business activities independently."
The investment will be from Google's recently announced $10 billion India digitisation fund and will make it the second largest minority investor in Jio Platforms after arch rival Facebook. Google will also get a board seat, like Facebook.
"GIL (acquiror) is a wholly owned subsidiary of Google, LLC, collectively with all Google, LLC subsidiaries, ("Google"), Google LLC is a Delaware limited liability Company, and the wholly owned subsidiary of Alphabet Inc. The Acquirer is a holding company and does not own/ operate any of Google's products/services," said Google in its filing in the CCI.
Jio Platforms, along with its subsidiaries, "primarily offers/will offer digital products/services, including wireless, home broadband and enterprise broadband services, telecommunication services, mobile applications, various digital platforms, back-end technology services for ecommerce entities and other miscellaneous software and technology related services," the filing added.
According to legal experts, the companies need the anti-trust body's approval since both of them have access to large amounts of customer data through their presence in the mobility segment, in addition to having large assets and turnover.