Reliance-Disney Deal Sparks CCI Concerns Harming Rivals

India's antitrust authority has reached a preliminary conclusion that the $8.5 billion merger between Reliance and Walt Disney's media assets could harm competition, especially given their dominance in cricket broadcasting rights, according to media reports. 

The Competition Commission of India (CCI) has privately notified both Disney and Reliance of its concerns, requesting that the companies provide justification for why a formal investigation should not be launched, according to one of the sources.

"Cricket is the biggest concern for the CCI," the sources stated.

The merged entity, expected to be majority-owned by Mukesh Ambani's Reliance is set to dominate cricket broadcasting rights worth billions of dollars, raising concerns about its pricing power and influence over advertisers. Antitrust experts had previously warned that the merger, reported in February, would face intense scrutiny as it would create India's largest entertainment entity, competing with the likes of Sony, Zee Entertainment, Netflix and Amazon with a combined portfolio of 120 TV channels and two streaming services.

The CCI had previously sent around 100 questions to Reliance and Disney regarding the merger. According to sources, the companies informed the regulator that they are prepared to divest fewer than 10 television channels to address concerns about market dominance and secure early approval. However, a second source indicated that the companies might need to offer further concessions to satisfy the CCI's concerns, noting that the current notice “is a precursor of things getting complicated.”

The source added, "The notice means that initially the CCI thinks the merger harms competition and whatever concessions offered are not enough." A third source indicated that the CCI has given the companies 30 days to respond and clarify their stance.