Mukesh Ambani's Reliance and Disney's Rs 71000 crore merger faces scrutiny, CCI sends...

India's antitrust body, the Competition Commission of India (CCI), has sent over 100 queries to Mukesh Ambani-led Reliance Industries and Walt Disney about their $8.5 billion (over Rs 71000 crore approximately) India media assets merger. Sources told Reuters that antitrust experts have warned that the deal between Reliance and Disney, announced in February, could face severe scrutiny. One of the major reasons behind it is the deal creating India's biggest entertainment player with 120 TV channels and two streaming services.

The companies will also together own profitable rights for cricket, one of India's most popular sports.

For the unversed, the proposed mega-merger involves the combining of assets of billionaire Mukesh Ambani-led RIL’s Viacom18 and Walt Disney’s Star India.

RIL and Walt Disney, in a confidential submission to CCI, had clarified that the merger would not hurt the competition and that cricket rights would expire in 2027 and 2028.

Now, India's antitrust body is interested in seeking more details via two sets of questions - one is 'Why YouTube?' as it is a free, user-generated content service 'should be treated in likeness to Netflix and Disney'.

To this query, Reliance and Disney argued that YouTube also has licensed, paid content, as per Reuters sources. 

In addition, the CCI has also asked Reliance and Disney for details on which of them owns which sports rights and the time for which they own them. It has also sought information on who had bid for them formerly.

"The CCI is so far not raising concerns on the rights but is gathering information," said one of the sources.

If the Reliance-Disney deal is green lit, it will forever change the $28 billion entertainment market of India. 

Disney-Reliance is estimated to command 40% of the advertising market share in the TV and streaming segments.

(With Reuters inputs)

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