India’s antitrust body, the Competition Commission of India (CCI), is conducting a thorough examination of the proposed $8.5 billion (approximately Rs 71,000 crore) merger between Mukesh Ambani-led Reliance Industries and Walt Disney. Sources revealed that antitrust experts have expressed concerns about the potential dominance of this deal in the Indian entertainment landscape.
The merger, announced in February, would create India’s largest entertainment player, wielding control over 120 television channels and two streaming services. Furthermore, the combined entity would own valuable cricket rights, a sport deeply embedded in Indian culture. The proposed merger involves the integration of assets from Reliance Industries’ Viacom18 and Walt Disney’s Star India.
In a confidential submission to the CCI, Reliance and Disney emphasized that the merger would not hinder competition and that the cricket rights would expire in 2027 and 2028. However, the CCI has initiated a detailed investigation, sending over 100 queries to both companies.
One crucial question posed by the CCI is the comparison of YouTube with Netflix and Disney. The CCI seeks to understand why YouTube, a free and user-generated content platform, should be treated similarly to paid subscription services like Netflix and Disney. In response, Reliance and Disney have argued that YouTube also offers licensed and paid content.
Furthermore, the CCI is requesting detailed information about the specific sports rights owned by each company, the duration of these rights, and the previous bidders for these rights. While the CCI has not yet raised concerns about the rights themselves, it is actively gathering information to ensure a comprehensive understanding of the deal’s implications.
The proposed merger has the potential to significantly alter the $28 billion Indian entertainment market. If approved, Disney-Reliance is projected to capture a dominant 40% share of the advertising market within the TV and streaming sectors. The CCI’s investigation will determine whether this deal, while beneficial for both companies, will ultimately harm the competitive landscape of India’s thriving entertainment industry.
