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India approves Google's $4.5 billion deal with Reliance's Jio Platforms

Manish Singh
·2-min read
Traffic travels past a billboard for Reliance Jio Infocomm Ltd. in the Bandra area of Mumbai, India, on Saturday, Jan. 27, 2018. India's economy is expected to grow at 6.75 percent this year on the back of a recovery in second half of the year, Chief Economic Adviser Arvind Subramanian said in the Economic Survey presented in Parliament on Nov. 29. Photographer: Dhiraj Singh/Bloomberg via Getty Images
Traffic travels past a billboard for Reliance Jio Infocomm Ltd. in the Bandra area of Mumbai, India, on Saturday, Jan. 27, 2018. India's economy is expected to grow at 6.75 percent this year on the back of a recovery in second half of the year, Chief Economic Adviser Arvind Subramanian said in the Economic Survey presented in Parliament on Nov. 29. Photographer: Dhiraj Singh/Bloomberg via Getty Images

India’s antitrust watchdog has approved Google’s proposed investment of $4.5 billion in the nation’s largest telecom platform Jio Platforms, it said in a tweet on Wednesday.

Google announced in July that it would be investing $4.5 billion for a 7.73% stake in the top Indian telecom network. As part of the deal, Google and Jio Platforms plan to collaborate on developing a customized-version of the Android mobile operating system to build low-cost, entry-level smartphones to serve the next hundreds of millions of users, the two companies said.

Jio Platforms is planning to launch as many as 200 million smartphones in the next three years, according to a pitch the telecom giant has made to several developers. These smartphones, as is the case with nearly 40 million of Jio's feature phones in circulation today, will have an app store with only a few dozen apps, all vetted and approved by Jio, according to one developer who was pitched by Jio Platforms. An industry executive described Jio’s store as a walled garden.

The Indian watchdog, Competition Commission of India (CCI), was said to be interested in reviewing the data-sharing agreement between Google and Jio, Indian newspaper Economic Times reported last month, citing an unidentified source.

The announcement today comes days after the CCI announced it had directed an in-depth investigation into Google to verify the allegations of whether the Android-maker promotes its payments service during the installation of an Android smartphone (and whether phone vendors have a choice to avoid this); and if Google Play Store's billing system is designed "to the disadvantage of both i.e. apps facilitating payment through UPI, as well as users."

The call for this in-depth investigation was prompted after the CCI concluded in its initial review that requiring Google Pay to be used to buy apps or make in-app payments was an “imposition of unfair and discriminatory condition, denial of market access for competing apps of Google Pay and leveraging on the part of Google,” the watchdog said.

Jio Platforms, which has amassed over 400 million subscribers, has this year raised more than $20 billion from 13 high-profile investors, including Facebook, which alone invested $5.7 billion into the Indian firm. That deal has also been approved by the CCI. Jio Platforms is a subsidiary of Reliance Industries, India's most valued firm. It is run by Mukesh Ambani, Asia's richest man.