Reliance-Disney $8.5 Billion Merger Under Intense Scrutiny: CCI Fires 100 Antitrust Questions!

The Competition Commission of India (CCI) has asked nearly 100 questions to Reliance Industries and Walt Disney about their $8.5 billion merger of Indian media assets, according to a Reuters report on Monday. These questions include details about sports rights, adding to the scrutiny of the deal.

The merger, announced in February 2024, could create the largest entertainment company in India with 120 television channels and two online streaming services. Antitrust experts believe this merger will be closely examined, especially since both companies will share rights to cricket broadcasts.

Reliance Industries and Walt Disney have submitted a confidential statement to the antitrust regulator, arguing that the merger will not harm competition. They pointed out that the cricket rights will expire in 2027 and 2028, giving competitors a chance to bid for them.

The CCI has asked for more details about the merger, including why YouTube, which mainly features free and user-generated content, should be considered the same as paid services like Netflix and Disney+. Reliance and Disney have responded, noting that YouTube also offers paid content, has a wide reach, and holds licenses.

Data from Media Partners Asia showed that in 2023, YouTube held 88% of the online video market in India, while premium video services like Netflix and Disney+ held 12%. The high value of digital and television cricket rights, along with other sports rights like the Wimbledon tennis championship, has increased the scrutiny of the merger.

So far, the CCI has not raised concerns about the sports rights but is collecting information. The regulator has also asked questions about the ownership of these sports rights due to the size of the deal.

Reliance and the CCI have not given an official response to Reuters. The merger, if approved, will significantly change India’s $28 billion entertainment market. Analyst firm Jefferies estimates that the combined entity could control 40% of the television and streaming market in India.