BTS Investment 1 Pte. Ltd., Reliance Projects & Property Management Services Limited, Reliance Storage Limited.(“RSL”) and Viacom 18 Media Private Limited (Viacom 18) — Combination C-2022/07/951

Notice under Section 6(2) of the Competition Act, 2002 jointly given by BTS Investment 1 Pte. Ltd., Reliance Projects and Property Management Services Limited, Reliance Storage Limited and Viacom 18 Media Private Limited

CORAM:

Mr. Ashok Kumar Gupta Chairperson

Ms. Sangeeta Verma Member

Mr. Bhagwant Singh Bishnoi Member

Order under Section 31(1) of the Competition Act, 2002

1. On 8th July 2022, the Competition Commission of India (‘Commission’) received a Notice under Section 6(2) of the Competition Act, 2002 (‘Act’), jointly given by BTS Investment 1 Pte. Ltd. (‘BTS1’), Reliance Projects and Property Management Services Limited (‘RPPMSL’), Reliance Storage Limited (‘RSL’) and Viacom 18 Media Private Limited (‘Viacom 18’) [Hereinafter, BTS1, RPPMSL, RSL and Viacom 18 are collectively referred to as the ‘Notifying Parties’]. The Notice was filed pursuant to the execution of various binding documents, including (i) Business Transfer Agreement, (ii) Share Purchase Agreement, and (iii) Investment Agreement, each dated 27th April 2022 executed between the Notifying Parties, and (iv) Shareholders’ Agreement dated 27th April 2022 executed between the Notifying Parties and affiliates of Paramount Global.

2. The Proposed Combination envisages the amalgamation of RPPMSL’s Jio Cinema Business Undertaking (‘Jio Cinema Business’) with Viacom 18, following an investment by BTS1 and RPPMSL, inter alia, through the following steps:

(i) issuance and allotment of the shares of RSL to RPPMSL and BTS1 by way of preferential issue; and (ii) amalgamation of RSL (which will hold the Jio Cinema Business) with Viacom 18

3. Prior to the Proposed Combination, RIL Group had sole control over Jio Cinema Business and joint control over Viacom 18, along with Paramount Global. Pursuant to the Proposed Combination, RIL Group will hold joint control over Viacom 18 (now including Jio Cinema Business), along with Paramount Group and BTS1.

4. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of Business relating to Combinations) Regulations, 2011 (‘Combination Regulations’), vide letter dated 1st August 2022, certain information and clarifications were sought from the Notifying Parties. The response to the letter was filed on 22nd August 2022, after seeking extension of time. Since the response filed was incomplete, vide letter dated 1st September 2022, the Notifying Parties were asked to provide the complete information. The responses to the aforementioned letter were filed on 6th September 2022 and 9th September 2022.

5. BTS1 is a company incorporated under the laws of Singapore and currently has no presence in India. It is in the process of raising capital from various investors, including sovereign funds, multinationals and global institutional investors. Asia Initiatives Pte. Ltd. holds 100% of the ordinary equity shares of BTS1 which, in turn, is jointly held by Lupa Systems LLC (together with its affiliates, collectively referred to as ‘Lupa Group’) and Mr. Uday Shankar [Lupa Group and Uday Shankar are collectively referred to as ‘BTS Group’]. BTS Group has invested in entities engaged in various sectors in India.

6. RPPMSL, a wholly owned subsidiary of Reliance Industries Limited (‘RIL’), is engaged in the provision of IT support services, business and infrastructure support services, manpower support services and erection and commissioning of telecom facilities. RPPMSL currently owns and operates Jio Cinema Business, a video-on-demand (‘VOD’) streaming service known as Jio Cinema Over The Top (‘OTT’) platform. RSL, an affiliate of RIL group, is presently not engaged in any business activities.

7. RIL is a public listed company incorporated under the laws of India and is broadly engaged in the business of hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and digital services. RIL group (through subsidiaries, associates or affiliates) is, inter alia, engaged in the following activities:

(i) Owning and operating VOD OTT platforms for the retail supply of audio visual content, i.e., (a) Jio TV through Jio Platforms Limited (‘JPL’) and (b) ALT Balaji through Balaji Telefilms Limited (‘Balaji Telefilms’). RIL Group is also present in the provision of VOD OTT services through JioSaavn, Den TV+ and BookMyShow. However, it has been submitted that the primary business of Jio Saavn, BookMyShow and Den Networks Limited (‘Den’) is streaming of music, ticketing and cable TV services, respectively. Further, RIL group, through JPL, operates Jio TV+, an aggregator of different OTT platforms accessed through set-top boxes, and MyJio, which is a self-service application that enables customers of Reliance Jio Infocomm Limited’s (‘RJIL’) wireless broadband internet services to access value-added services and OTT services such as Jio Cinema. It is submitted that Jio TV+ and MyJio do not directly produce or license content for supply to viewers, unlike OTT platforms, and hence, do not provide services that are similar/substitutable to OTT platforms.

(ii) Licensing of audio visual content through Balaji Telefilms, Jio Studios (business segment of RIL) and Colosceum Media Private Limited (‘Colosceum’);

(iii) Provision of wireless broadband service through RJIL and provision of wired broadband service through RJIL, Den, Hathway Cable & Datacom Limited (‘Hathway’) and GTPL Hathway Limited (‘GTPL’).

The abovementioned entities/business segments are collectively referred to as ‘RIL Group Affiliates’.

8. Viacom 18, a 51:49 joint venture between RIL Group and Paramount Global (through its affiliates), respectively, is engaged in the media and entertainment sector. It is, inter alia, engaged in the business activities of broadcasting, OTT streaming through Voot and Voot Kids (Voot and Voot Kids are collectively referred to as ‘Viacom 18 OTT Platforms’), production and distribution of feature films and digital content and licensing of intellectual property rights. It is also engaged in the business activity of licensing of audio visual content through its business divisions, viz., Viacom Motion Pictures and Tipping Point.

9. Paramount Global is a global media and entertainment company that creates content and experiences for audiences worldwide through consumer brands such as Paramount+, Pluto TV, CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central and BET. In India, it is present, inter alia, through Viacom 18 and separately in film distribution and program content licensing.

10. The Parties have considered overlaps between Notifying Parties, RIL Group Affiliates, BTS Group and Paramount Global. It is submitted that there are no overlaps between the business activities of BTS Group and Jio Cinema Business or Viacom 18 (including its affiliates) in India.

11. Based on the submissions of the Notifying Parties, the Commission observed horizontal overlap in the market for retail supply of audio visual content through OTT platforms in India between Jio Cinema OTT platform, Viacom 18 OTT platforms and the platforms of RIL Group Affiliates. It is also observed that, at present, Paramount Global does not have any independent presence in this market. Further, the OTT platforms have various business models based on revenue, such as advertising-based VOD, subscription-based VOD, etc., but these have not been considered sub-segments at this stage.

12. The Commission decided to leave the delineation of the relevant market open as it was observed that the Proposed Combination is not likely to cause an appreciable adverse effect on competition in the relevant market.

13. Based on the submission of the Notifying Parties, the combined market shares of the aforementioned platforms in the market of retail supply of audio visual content through OTT platforms is in the range of [0-5]% based on (i) total watch time, (ii) revenue generated from operations of OTT platform and (iii) online advertisements. Further, the combined market shares of these platforms on the basis of monthly active users is less than 20%. The incremental market share is insignificant for each of the abovementioned parameters. Moreover, there are competitors such as Netflix, Amazon Prime Video, ZEE5, Disney+ Hotstar, Sony Liv, etc., which have both a large viewer base as well as content and will continue to compete with the Parties post the Proposed Combination.

14. With regard to the vertical relationship between the Parties, it is submitted that the entities exhibit a vertical overlap in the licensing of audio visual content in India (upstream market) by Viacom 18, RIL Group and Paramount Global and retail supply of audio visual content through OTT platforms in India (downstream market) by Viacom 18 OTT platforms and Jio Cinema OTT platform.

15. Based on the submission of the Notifying Parties, the Commission observed that the combined market share of the Parties in the upstream market is [0-5]% in terms of revenue. Further, the presence of the Parties in the downstream market, as discussed in the foregoing paragraphs, is also not such as to cause any competition foreclosure in any segment.

16. Furthermore, an existing complimentary relationship is exhibited by RIL Group Affiliates engaged in the provision of wired and wireless broadband service and the Viacom 18 OTT platforms and Jio Cinema OTT platform. As Jio Cinema Business is being transferred from sole control of RIL group to joint control of RIL group, BTS Group and Paramount Global, it appears that there is no change in the incentive of RIL group to raise any competition concerns.

17. It is submitted by the Notifying Parties that, even after amalgamation of the Viacom18 OTT platforms with the Jio Cinema OTT platform, subscribers of the Viacom18 OTT platforms will continue to be able to access its content through the amalgamated OTT platform. Further, it is submitted that there will be no exclusivity in respect of these amalgamated OTT platforms, and Viacom18 will be free to offer the amalgamated OTT platforms to third parties/users.

18. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

19. The order may be revoked if, at any time, the information provided by the Notifying Parties is found to be incorrect.

20. The information provided by the Notifying Parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

21. The Secretary is directed to communicate to the Notifying Parties accordingly.