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Anticipated Antitrust Concerns Arise in Reliance-Disney Merger

 |  February 29, 2024

Reliance Industries Ltd.’s Viacom18 and Walt Disney Co.’s Star India have announced a merger, marking the largest combination in the country’s media history. Valued at over Rs 70,000 crore or $8.5 billion, this collaboration catapults the merged entity into a position of unparalleled dominance, particularly in the realm of cricket broadcasting rights, boasting a combined total of 120 TV channels, and wielding influence over two prominent OTT platforms: Disney Hotstar and Jio Cinema.

The merger’s colossal scale raises significant scrutiny from the competition regulator, sparking speculation about the hurdles it may encounter before receiving the green light. The Competition Commission of India (CCI), recalling its recent evaluation of the now-abandoned Zee-Sony merger in 2022, is anticipated to closely scrutinize the individual and collective market shares wielded by Viacom and Star in various segments of the entertainment industry.

Notably, the CCI’s analysis of the Zee-Sony merger highlighted concerns regarding market concentration, particularly in sectors such as Hindi General Entertainment Channels (GECs) and Hindi films. Ela Bali, a partner at JSA Advocates & Solicitors, shed light on the regulator’s previous stance, indicating that the combined market share of Sony-Zee in Hindi GECs ranged between 40–45%, with a comparable figure of 35–40% in the Hindi films segment. These statistics raised red flags within the competition law framework, prompting the CCI to mandate divestment of channels to mitigate competition concerns and alleviate market concentration.

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In light of this precedent, industry experts anticipate rigorous scrutiny of the Viacom18-Star India merger, with a keen focus on market share dynamics across various entertainment segments. Given the merged entity’s formidable presence in cricket broadcasting, traditional TV channels, and burgeoning OTT platforms, the competition regulator is poised to evaluate potential antitrust implications and assess the merger’s impact on market competition.

As stakeholders await the CCI’s verdict, the media industry braces for a transformative shift, with the impending merger poised to redefine the contours of competition and consolidation within India’s vibrant media landscape.

Source: NDTV Profit