With the news of the social media giant Facebook buying a 9.99% stake into the Mukesh Ambani-led Reliance Jio Platforms for $5.7 billion, comes along a lot of concerns related to the future of the Indian internet and digital ecosystem.
As of now, only two aspects of the entire deal are being mostly discussed or highlighted. First, the fact that it one of the largest investments across the world for a minority stake in the technology sector. Second, Facebook stepping in will help reduce RIL’s debt burden, which bulged due to the breakneck expansion of Jio and other businesses.
However, the main issue that catches the eyes here first is the fact that both the companies Facebook and Reliance posses large goldmines of user data. Therefore, it is important to pay attention to out how exactly the data-sharing agreement between these two giants will affect the entire digital landscape of India.
As of February 2019, Facebook comprises of 303.82 million Indian users which roughly accounts for 21% of the entire population of India. WhatsApp which is now owned by Facebook has 400 million Indian users as well. On the other hand, Jio has been reported to currently have 388 million subscribers.
Various technology experts are now worried about Facebook using Jio’s existing reach to further their “social graph,” which is functionality that maps users and their relationships with other digital entities.
The social media giant has been already known to collect a whopping 52,000 data points on all their users individually for their ad targetting platform. Now, with this recent partnership that Facebook forged with Jio, their database can very well get access to more powerful data points. This could include advanced behavioural and usage patterns of Indian users. (who are subscribers of the Jio services)
The prospect of this is very scary as Facebook has had an extremely controversial past related to privacy scandals. One of the major ones among them being the Cambridge Analytica Scandal.
In early 2018, Cambridge Analytical, a political consulting firm, harvested the personal data of millions of Facebook users without their consent and used it for political advertising and campaigns targeted to turn the tides.
This was described as a ‘watershed moment’ in the public understanding of personal data and precipitated a 17% fall in Facebook’s share price. It also brought Facebook a lot of bad press along with being fined a hefty penalty fee of $5 billion by the FTC.
Now on the flip side of Reliance-Jio deal how is Reliance Jio going to leverage Facebook’s repository of data is also something that needs to be discussed.
By now it is quite clear that the Mukesh Ambani led Jio aims to build an entire ecosystem with a suite of digital products and services besides expanding the telecommunications network. Jio Money, Jio Chat, Jio Cloud, Jio Gate, and Jio Saavan are some of the most popular Jio apps that are trying to compete with market leaders Paytm, WhatsApp, Amazon AWS, MyGate and Amazon Music respectively.
Having Facebook by its side, Reliance Jio could very well use this partnership to leverage Facebook’s powerful ad platform along with all the humongous amount of data they gathered about their subscribers to further increase the awareness quotient for Jio products and services. This could easily help Reliance Jio knock all of their other telco competitors out of the game!
However, it should also be noted that when it comes to building a digital ecosystem like Jio plans to, the data sharing and data privacy policies are something which needs to be carefully constructed. Something which isn’t really Facebook’s strongest suit.
In addition to all of this, another very concerning issue which has popped up with this Facebook-Jio deal is the fact that both these companies can potentially start creating a monopoly in the entire Indian internet connectivity domain.
Reliance Jio first started attracting Indian users by offering free calls and internet data. After that, they slowly progressed towards charging only throwaway prices for their services. Also, Jio’s primary service came along with additional perks such as the Jio Prime membership and the access to all the apps under the Jio umbrella. This helped Indian users get heavily relied on Reliance Jio as none of the other competing telcos could keep up with Jio’s offerings at the time.
Now that Reliance Jio possesses this huge consumer base of 388 million subscribers, they can easily monopolise the internet space with something along the lines of the ‘Free Basics’ which was proposed by Facebook in early 2016.
Under the Free Basics initiative, the social media giant wanted to connected millions of people in India with free internet service, which was meant to offer access to some basic sites for free. However, the notion of favouring access to certain content went against the basic principle of net neutrality for which it was opposed quite heavily by everyone. Thus Facebook had to retreat. But now with this partnership coming into existence, the entire concept of ‘Free Basics’ could once again become a reality with Reliance Jio’s existing and ever-expanding user base only if not with all the telcos combined.
Be it whatever, the partnership between Facebook and Reliance Jio will surely change the entire digital landscape of India for sure. Now it remains to be seen whether it will be for the good or for the worse. We will keep you posted on all future developments. Stay Tuned.