Should the Govt See Internet Neutrality in Facebook-Jio Deal?

It is being  argued that Internet neutrality is being compromised in the much hyped Facebook-Jio deal of  more than Rs 43,000 Crores, as it will create a monopoly of these two giants against which even the Flipkart-Walmart and Amazon may not be able to face. This is because by this deal, Facebook-Jio and their E-commerce ventures will control the large data pool and will also have  access to the most advanced data analytics and AI algorithms that will give them an advantage in the E-commerce market.

If true, this has problems in several  quarters. First,  India is committed to Net Neutrality, the rules for which were implemented on 12th of July 2018. According to this concept,  no Internet provider could engage in data discrimination.  Any Internet  provider that breaks this rule  will face a cancellation of its licence in India.  The concept aims for a level playing field in which no player gains a monopoly over data.

When looked from this perspective, the Facebook-Jio deal seems to be moving in a direction where they will have an edge over data and therefore, will gain a monopoly over the internet market. Reduction in the number of E-commerce platforms will also give them a control over the online retail sector.

Hence, it is being felt that this deal is going against the concept of Net Neutrality.

“The Facebook-Jio deal is the coming together of one of the world’s biggest data platforms and India’s biggest data platform. There are multiple battles (likely to be fought) here including one for the dominance in e-commerce space and other in digital payments. In digital payments, apps like Paytm and PhonePe already facing cash crunches and this will be forced to join Jio and Facebook’s platform."

--Salman Waris, Managing Partner, TechLegis Advocates & Solicitors

"There are two expectations from any new and large-scale deal like this. First, it should adhere to the letter and spirit of India’s FDI norms. Second, capital infused should be used to develop the Indian market and overall infrastructure rather than rout competition and gain dominance. The first kind is key to development while the second negatively impacts India’s core strength of its diverse businesses."

--Praveen Khandelwal,   National Secretary General, CAIT (Confederation of All India Traders)

If the internet service providers reduce in numbers and only one major player is left, it would be detrimental to the economy in the long run, as telecom and internet is a major sector which employs a large number of people and generates a large amount of revenue. Concentration of revenue in a few hands is never good for the economic health of the country.

Out of the payment platforms, PayTM and others may also take a backseat, which is another problem area for the economy. However, Google Pay may be able to tide over the onslaught as Google is another data carrier and drives the AI and data analytics for commerce growth equally well. However, it is to be noted that the indigenous businesses would be worst hit by this policy and hence, care needs to be taken to grant permission to such a deal.