Reliance Jio & Facebook differ on key issues

Bengaluru | New Delhi: Facebook could find itself sparring with Reliance Jio in policy debates over how data is collected, stored and shared in India, said legal experts, as the two technology giants differ markedly in their stance on these issues.

The American social media company, which is paying $5.7 billion for a minority stake in the digital arm of India’s largest conglomerate, has opposed the Centre’s demand that data of Indians be stored locally. Reliance Industries chairman Mukesh Ambani, on the other hand, has been unequivocal that data of citizens must be controlled and owned by Indians, and not foreign corporations.


Facebook and Reliance Jio’s views also diverge sharply on the matter of providing access to private social media data to law enforcement authorities.

Last year, Jio told the Telecom Regulatory Authority of India (Trai) that all over-the-top (OTT) platforms should give full data access — including decryption keys — to Indian law enforcement authorities. However, Facebook-owned WhatsApp has been fighting off requests from the Indian government for tracing origin of messages citing end-to-end encryption. The company believes that breaking encryption would compromise user privacy.


In October, Facebook told the Supreme Court that it was not obliged to share user data with the Indian government.

Experts said that while the two companies may not dilute their stance, especially with respect to encryption or data localisation, they could co-exist in many areas.


A person with direct knowledge of the developments in the runup to the mega deal said the differences (about policy matters) were discussed before inking the agreement. “During due diligence, we had come across such concerns. All litigations that were (ongoing) and the policy positions that both parties have taken were part of the disclosures,” the person said. “But these issues are separate from the deal, which is purely commercial. No policy conflict has come in the way of moulding the deal.”

In response to fresh queries on the issue, a spokesperson for Reliance Jio referred ET to an earlier reply from Anshuman Thakur, Reliance’s head of strategy, who had said that Facebook and Jio are independent entities and “there’ll be areas that we will collaborate in, but there will be areas where we will potentially not agree with each other either”.

“Both the organisations are very conscious about consumer data and just making sure that consumer data is respected. And also, by abiding by all the regulations. There will be things where we’ll have a difference of opinion … but that’s the way it is,” Thakur said.


Facebook said the intent of its collaboration with Jio Platforms is to enable new opportunities for the millions of micro and small businesses in India. “We will continue to have independent views on a number of topics,” a Facebook spokesperson said in an emailed response.

The Facebook-Reliance Jio deal will go to the Competition Commission of India (CCI) for approval amid concerns over control of data, privacy and net neutrality.

Since its launch in September 2016, Jio has emerged as India’s largest telecom company with over 388 million subscribers. Facebook has over 328 million users on its social network and over 400 million users on its WhatsApp messaging platform in India.

Experts believe that while there are areas of contradiction, mutual benefits will outweigh those.

“Facebook is unlikely to change its stance on issues such as end-toend encryption just for India and Jio, because it is a global company and its policies are standard across the globe,” a former top bureaucrat told ET. “(Mukesh) Ambani also has strong views on issues such as data localisation, so it will be interesting to see how it pans out,” the person added.


Legal experts feel FB’s stance on allowing access to law enforcement agencies and encryption will not change. “If they start giving law enforcement access in India, it sets a precedent for other countries,” said Vrinda Bhandari, a Supreme Court lawyer.

Last year, without specifically mentioning WhatsApp, Reliance Jio had told the government that many companies were employing end-to-end encryption under the guise of providing better security to users, and India must enable traceability on encrypted platforms. WhatsApp has resisted the government’s demand on traceability for two years now.

Bhandari said that while Reliance Jio may tone down its attack on WhatsApp, it will not back down on its demand that Indian data be stored locally. “Its business interests there are much stronger than Facebook’s investment,” she said.

Anu Monga, partner of Indus-Law, said the companies would have envisaged this issue while finalising the deal. “By lending different views to a debate, I don’t see it as one party losing and the other one winning. But it will be interesting to watch the policy positions presented by them now.”

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