The Competition Commission of India (CCI) has officially approved the merger between Reliance Industries and Disney‘s Indian media assets, valued at $8.5 billion. The CCI has released a public version of the order detailing the reasons for approving this significant merger.
In August, The Commission approved the proposed combination involving Reliance Industries Limited (RIL), Viacom18 Media Private Limited (Viacom18), Digital18 Media Limited, Star India Private Limited (SIPL), and Star Television Productions Limited (STPL), subject to the compliance of voluntary modifications
CS Anupriya Saxena, Partner, JMJA & Associates LLP said that the concerns about the Reliance-Disney merger, especially regarding its control over cricket broadcasting, reflect broader anxieties about market consolidation in the media industry.
The commission directed that the Parties will not bundle TV and OTT ad slot sales for all three cricketing rights available with the parties i. e., IPL, ICC, and BCCIforthe balance tenure of the existing rights. “Cricket is a dominant force in Indian viewership and ad revenue, and if the merged entity held too much power over broadcasting rights, it could lead to inflated advertising rates and limited competition,” said CS Anupriya Saxena, Partner, JMJA & Associates LLP.
Further directing the parties to commit to divesting, or procuring the divestiture of, the Divestment TV Channels by the end of the divestiture period as a going concern to an approved purchaser(s) on terms of sale approved by the Commission in accordance in this remedy proposal. To carry out the divestiture, the Parties shall commit to entering into a final binding business transfer agreement(s) for the sale of the Divestment TV Channelstoan Approved Purchaser(s) within the Divestiture Period. “CCI’s intervention requiring voluntary modifications, like the divestment of seven TV channels, is critical to maintaining a competitive environment. This ensures smaller players still have a chance in the market, promoting a healthier media ecosystem,” she added.
Such safeguards are essential in high-stakes sectors like sports broadcasting to prevent monopolistic practices while allowing innovation and growth through mergers.CS Anupriya Saxena, Partner, JMJA & Associates LLP.
The CCI carefully examined potential anti-competitive issues, especially in areas like sports broadcasting, TV channels, and OTT platforms. To mitigate these concerns, the CCI has imposed conditions like asset divestments and restrictions on bundling rights. This balanced approach aims to ensure fair competition and consumer benefits while allowing the merged entity to leverage economies of scale and business synergies. “The CCI’s analysis, particularly of overlapping markets in sports broadcasting, TV channels, and OTT platforms, demonstrates its thorough examination of potential anti-competitive practices,” said Vipul Jai, Partner, PSL Advocates & Solicitors
The proposed divestments and restrictions on bundling of rights are sensible measures to ensure that competition in the market remains robust, while the merger brings benefits in terms of scale and business synergies for the involved entities.Vipul Jai, Partner, PSL Advocates & Solicitors
The Competition Commission of India sought input from various stakeholders, including regulatory bodies like TRAI and MIB, during its review of the merger. “Concerns arose primarily around horizontal overlaps in the wholesale supply of TV channels, the retail supply of audiovisual content through over-the-top platforms, and the broadcasting and streaming of sports events – particularly cricket. To address these concerns, the parties submitted voluntary proposals for modification,” said Anant Singh Ubeja, Senior Associate, SKV Law Offices.
The voluntary commitments provided include adherence to TRAI regulations on pricing and commitments regarding the non-bundling of sports rights.Anant Singh Ubeja, Senior Associate, SKV Law Offices.
Nazneen Ichhaporia, Partner, ANB Legal highlighted that based on a preliminary reading of the CCI order in this case, it appears that CCI has undertaken a detailed scrutiny of various possible scenarios that may adversely impact the consumers, and carefully suggested the conditions of the proposed merger, keeping these concerns in mind.
The merger between Reliance Industries, Viacom18, and Star India could potentially lead to a monopolistic or duopolistic market. However, it’s unlikely that this merger will result in anti-competitive behavior. “The requirement for divestment of seven TV channels indicates the CCI’s focus on maintaining competitive balance in the market, thereby creating a level playing field for small players. The conditions imposed focus on preventing monopolistic practices and ensuring that consumers have access to diverse media options,” she added.
On the whole, the merger appears to be a win-win for all – it would enhance Reliance’s streaming capabilities and broaden its content offerings while leveraging Disney’s extensive library and intellectual properties – and the consumers would benefit from the availability of more creative content.Nazneen Ichhaporia, Partner, ANB Legal
The merger of Reliance Industries, Viacom18, and Star India is a major development in India’s media industry. By combining their strengths, the companies aim to create a powerful entity with a diverse range of media assets, including TV channels, digital platforms, and sports broadcasting rights.
The final proposed combination will be: Viacoml8 holding 46.6%, RIL holding 16.6% and Disney Entities holding 36.8%. “The merger involves a series of intricate transactions, including share transfers, demergers, and acquisitions. The CCI’s approval comes after addressing potential competition concerns, ensuring that the combination does not create anti-competitive effects in key sectors,” said Kritika Seth, Founding Partner, The Victoriam Legalis (TVL)
By enforcing divestitures and placing restrictions on ad sales and influence over divested assets, the CCI seeks to maintain fair competition in the media industry. The joint venture, while creating a formidable player, is structured to ensure compliance with industry standards and safeguard consumer interests.Kritika Seth, Founding Partner, The Victoriam Legalis (TVL)
K.K. Sharma, Partner, Singhania & Co. highlighted that the profiles of the likely purchaser(s) of the divested have been outlined by the Commission and it excludes Zee and Sony from the potential acquirers of the divested units, in an attempt to ensure that the competitive landscape does not get unduly concentrated after divestment.
On this issue, the Commission has gone by the assurance given by the merging party that this control is, in any case, temporary and after 4 years in the next round of bidding, the rights may go to some other entity and, therefore, that part has not caused any difficulty in the approval of the proposed merger.K.K. Sharma, Partner, Singhania & Co.
The CCI noted that while the merging companies have secured rights for various sports, cricket is the most popular sport in India. Even within cricket, the IPL, ICC, and other BCCI matches are the most valuable rights, commanding significantly higher bids than other cricket events or sports. The companies currently hold exclusive rights for major cricket events for a limited period, after which new bidding processes will determine the rights holders. “Cricket rights seemed to be a sticky issue until the end. Yet, the CCI decided to accept behavioral commitments requiring the parties to keep the subscription and advertisement rates “reasonable”, only during the current broadcasting period,” said Vivek Agarwal, Partner, DMD Advocates.
Even if the parties win the next term, the CCI can deal with any anti-competitive conduct through ex-post enforcement.Vivek Agarwal, Partner, DMD Advocates
The CCI, after reviewing the merger proposal and considering the voluntary commitments offered by the merging parties, has concluded that the deal is unlikely to have any adverse effects on competition in India. Therefore, the CCI has approved the merger, subject to the fulfillment of the committed conditions. “While doing so, the CCI has found and observed that there will be no appreciable adverse effect on competition,” said Shashank Agarwal, Advocate, Delhi High Court.
This observation has come in light that content in sports segment is largely acquired through competitive bidding process and are awarded for a limited time period. Therefore, there will no incumbency advantage in the sports bidding market.Shashank Agarwal, Advocate, Delhi High Court
Mahek Joshi, Advocate, Chambers of Saurav Agrawal distinguishes with the Zee-Sony merger. “The CCI’s order in the Reliance-Disney merger presents several crucial competition law determinations that warrant detailed examination. First, the Commission’s approach to market segmentation under Section 20(4) is particularly noteworthy – while accepting broad market definitions for TV channels, it simultaneously conducted analysis at granular sub-segmental levels, evidencing a departure from its traditional whole-market approach seen in cases like Zee-Sony merger,” she adds.
Section 20 of the Competition Act, 2002 allows the Competition Commission of India (CCI) to investigate whether a combination of businesses has caused or is likely to cause an adverse effect on competition in India. However, Section 29(1) of the Competition Act, 2002, allows the Competition Commission of India (CCI) to issue a notice if it suspects that a merger or acquisition has harmed competition in India. “The Commission’s treatment of cricket broadcasting rights as a distinct market power concern is legally significant. Despite the temporary nature of these rights (with IPL, ICC, and BCCI rights expiring by 2027), the Commission found sufficient concern to issue a Section 29(1) notice – a rare step in merger cases,” she further added.
This suggests that even time-bound exclusive rights can trigger AAEC concerns under Section 20(4)(c) when they create significant market power, even if temporary.Mahek Joshi, Advocate, Chambers of Saurav Agrawal
Alay Razvi, Managing Partner, Accord Juris highlighted that the two giants combine forces without compromising competitive dynamics. “CCI’s approach has made sure to safeguard competitors from monopolistic risk,” he added.
The market will take time to welcome the new structure, however, it will be important that consumer welfare remains central to the evolving market and regulatory board.Alay Razvi, Managing Partner, Accord Juris
Subhash Bhutoria, Founder & Principal, Law SB highlighted that terms such as ‘unreasonable level’ or ‘highest in the industry’ are highly subjective and may not serve the purpose as such.
CCI has in fact observed that there is no single commonly accepted metric for assessment of the OTT streaming market and thus such concerns qua ‘relevant market’ needs to be addressed conclusively.Subhash Bhutoria, Founder & Principal, Law SB
