Platform ecosystems,market hierarchies and the megacorp: The case of Reliance Jio

Polyester, power and platforms

The inherent advantages of the conglomerate business is the first confluence of Reliance and the megacorp paradigm that we will explore. Running in parallel to the growth of Silicon Valley, the evolution of Reliance Industries has been a multi-generational story of adversarial commerce set amidst the evolution of state economic management in India. Back in the command economy era of Indira Gandhi’s 1970s Congress governments, Anil Dhirubhai Ambani returned from working in Yemen and set his sights on the potentials of polyester in India’s historically important textile trade. In the pivotal city of Bombay (now Mumbai), Ambani had to contend with the hegemony of an existing oligarchy, leading him to develop innovative public investment schemes in an economic culture dominated by closed family holdings. He was able to do so because India was also, at that time, an autarchic market with few opportunities for its habitual savers to invest. Ambani’s acumen in raising public funds, without relinquishing effective control to shareholders, gave Reliance the capacity to wrest control of the local textile markets, and to court local (and later national) politicians who controlled the vital licences needed to operate a business of any real size. The goal was always to establish a hegemonic position in the relevant market, which was achieved following protracted contests with the Wadias and Mehras in Polyester (Vimal vs Bombay Dyeing vs Okray Mills) and, as Reliance moved up the value chain, against the Ruias in petrochemicals. With a licence to operate oil refineries, a strategically significant sector, Reliance emerged as a major player in finance, energy, infrastructure and one of the leading businesses in Bombay.

The evident success of Reliance’s innovative mobilisation of retail investors became a key foundation of its reputation as an Indian ‘corporate’ business, notwithstanding the fact that Reliance became embroiled in controversy over the legality of those share dealings (McDonald, 1998). For critics, such as press magnate Ramnath Goenka, Reliance Industries was symptomatic of the crony capitalism that characterised the Indian economy during the command economy era, where licences awarded by government officials in less than transparent processes conferred instant market power on their recipients. Nonetheless, by the time Dhirubhai Ambani died in 2002, he had become synonymous with business acumen. In a liberalising economy that elevated the importance of India’s entrepreneurs, the now considerable Reliance empire was divided amongst his two sons. Mukesh Ambani, the elder, took control of the crown jewels of Reliance Industries, including oil refining and natural gas assets. Anil Ambani, the younger, took over Reliance Capital, Reliance Energy (electricity supply), and Reliance’s new telecoms venture, Reliance Infocomm. Alongside lucrative power supply and defence contracts, Anil Ambani’s Reliance ADA Group also made acquisitions in India’s sunrise sectors during the 2000s, including a number of media ventures in film, television, music, and gaming (McDonald, 2010). For his part, Mukesh Ambani made a large-scale intervention in India’s retail sector with the national chain of Reliance Fresh stores, before making his decisive move into the mobile sector with Reliance Jio in 2015. Once again, there was controversy and litigation, as Reliance Industries entered the market with an overnight acquisition of a hitherto little-known company, Infotel Broadband, that unexpectedly won substantial 2300 MHz spectrum rights, winning all 22 circles for broadband wireless access at government auction (see Curwen and Whalley, 2017).

The significance of this coup was both technical and regulatory, in the latter since Infotel Broadband had initially been an Internet Service Provider (ISP) that was unusually able to change its status to a Unified Access Service License (UASL) operator, following a ministerial intervention. It was still, however, to be treated as an ISP when it came to tariff charges, which meant that the newly-rebranded Reliance Jio service retained a spectrum usage charge of 1%, giving it a considerable operating cost advantage over its established UASL mobile competitors paying 3%–5% of revenues to the state. On the technical side, Reliance Jio was able to route its voice calls through its data spectrum, which paved the way for free voice calls. This upended the mobile retail market with a price war that drove the established players to the point of ruin and accelerated the convergence of the sector to just three players (Curwen, 2018). The great irony was the effective bankruptcy of Anil Ambani’s Reliance Infocomm service as a consequence of his brother’s larger venture. Drawing upon its own deep pockets, Reliance Industries was able to combine Jio’s free calls with free data plans and cheap handsets, funding a $16bn loss leader to get subscribers onto the Jio platform. This strategy allowed Jio to enlist 400 million subscribers and capture a third of India’s vast retail market in 3 years, despite objections to the practice from the Comptroller Auditor General (CAG), Sunil Mittal’s Bharti Airtel and UK’s Vodafone (Gochhait and Tripathy, 2016).

Ultimately, regulatory rulings were made to legalise Reliance’s use of the data-voice loophole, even as Vodafone was vigorously pursued by the Government of India over capital gains tax on its mergers, and hit with a hefty and retrospective tariff bill that went all the way to the WTO (Hill and Athique, 2018). Thus, in many ways, the government of India facilitated Jio in capturing India’s mobile digital market with a free data service, having expressly prevented Facebook from doing so in 2016 with Basics (see Block, 2019). As the action moved from capturing the user base, the Jio telecoms business was subsequently incorporated as a subsidiary of Jio Platforms in 2019, where Jio telecoms now sits alongside JioApps, JioMoney and JioMart. Following the ‘ecosystem’ model of the platform economy, the JioApps family combines network access, chat, internet browsing, and file sharing (JioChat, JioPages, JioSwitch) with content services (JioTV, JioSaavn (music), JioNews and JioGameslite), cloud services (JioCloud), eCommerce (JioMart, JioStore), smart home and health (JioGate, JioSecurity, JioHealthHub) with its own transactions architecture (JioMoney) covering payments and digital currencies. The consumer offering is accompanied by enterprise apps for employee monitoring, meetings, marketing and accounting (JioAttendance, JioMeet, JioOnline and JioGST). Evidently, Reliance’s Jio draws its inspiration from the multi-sided marketplaces of the ‘super apps’ that enclose their users within aggregated service markets and strive to become the gateway for all their web-based transactions (Athique and Baulch, 2019).

In order to populate this ‘just add water’ facsimile of a super platform, Reliance has embarked on a raft of media acquisitions, including India’s leading music streamer Saavn, as well as acquiring controlling stakes in Hathway Cable and Datacom and DEN Networks, India’s largest cable TV and broadband companies, alongside its ownership of Viacom18 and Voot (which means it now owns both the major local contenders in India’s OTT video market; Fitzgerald, 2019). JioMart also brings together Reliance’s existing interests and expertise in retail logistics, with its prospects boosted by regulatory restrictions brought in to counter the emerging duopoly of Amazon and Walmart in the eCommerce sector (Thomas, 2019a). JioMoney further extends Reliance’s much-debated pedigree in consumer financial products and services, as the government signals growing disfavour with AliPay’s backing of local mobile money providers. Equally, as the Government of India has, over the course of its two terms, moved from hugging to reprimanding the leaders of Silicon Valley platforms, Reliance has been able to lobby successfully for its interests in the shaping of incoming digital and platform regulation, bolstered by its longstanding state relationship and Digital India’s reliance on its fibre network (Findlay, 2019; Mukherjee, 2019). Sensing the weather, the Silicon Valley giants have responded with substantial investments into Jio Platforms, Facebook hedging its bets in its largest user market by taking a 9.99% stake in Jio and Google buying in at 7.73% (The Wire, 2020). All in all, inward investments of $20bn into Jio Platforms during 2020 entirely repaid Reliance’s outlay in throwaway pricing.

Taking some quick lessons from this condensed synopsis of India’s largest conglomerate, we could say that unlike algorithmic monopolies that diversified as the digital economy expanded to become contemporary megacorps, Reliance is a sprawling industrial conglomerate that used its hegemonic market positions to underwrite the quick-build of a digital enclosure for India. What these inverse trajectories have in common is the fundamental ambition to achieve market sovereignty, that is, the effective power to determine the norms of the markets in which the megacorp operates (see Athique, 2019). To that end, Reliance has made full use of its core competencies: raising capital, securing government licences, exploiting regulatory loopholes, and lobbying for its business models to become normalised at the expense of its competitors. The strategic imperatives of the megacorp have been achieved to a significant extent in this instance through the personalisation of ownership, and only subsequently given institutional form through the evolution of the business structure and the constitution of regulatory regimes.

Media, markets and megacorps

Unlike classical industrial monopolies gravitating upon specific sectors, or the depersonalised corporations of Nixon’s America, India’s biggest conglomerates have always been family-run operations diversified in proportion to their size. Reliance of the textile-era was cut from this cloth, and it spread its wings steadily across that sector before securing hegemonic positions in energy and infrastructure in the early auctions of India’s liberalisation in the late 1980s. Gaining income stability from these rent-thick sectors, Reliance’s subsequent reconfiguration towards expanding retail markets since the mid-2000s has been part of the global renaissance of merchant capitalism, which exercises a new power ‘over and against both manufacturing enterprises and state regulators’, and plays ‘an outsized role in making the market, setting the price, and influencing state tariff, trade and monetary policies’ (Lichtenstein, 2012). This dynamic is turbocharged in the digital domain, where it has long been apparent that the interoperability of manifold devices naturally predisposes monopoly positions in critical software infrastructure. When it comes to material infrastructure, the vast capital outlay required for mobile digital infrastructure at the national level determines that only the very largest companies can provide the industrial and financial competencies needed to operate as partners with government. The Faustian bargain of digital development in emerging markets is the institutionalisation of hegemonic positions in digital markets in order to offset the cost of providing the backbone for public sector provision. Over and above these domestic imperatives, the capabilities of informational megastructures have become a geostrategic objective in the digital arms race of the past decade, and hence a critical concern for any major state.

Amidst these larger concerns, it might be seen as merely collateral that Reliance has, in the course of a decade or so, become by far the largest ‘traditional’ media company in India. However, the dynamics of the media economy are an important antecedent for the multi-sided markets of the platform economy. India’s media economy provides a very useful illustration of the stratification of markets, and how a hierarchy of market layers predetermines the rise of megacorps. The media economy, as a gestalt, is a relatively new analytical proposition emerging from the recognition that erstwhile media industries, sectors and functions have effectively converged through privatisation, remediation and aggregation by conglomerates (Athique et al., 2018). It became increasingly germane in India as the big money moved in following the initial expansion of competition that came with the end of state monopolies in television, radio and telecoms (Athique, 2012). The integration of the media industries was driven not so much by cultural, technological or commercial innovation as by the disparities of scale between actors at different levels of the market, prompting us to think not of market sectors but of micro, meso and macro market layers (see also Lotz, 2019). We can usefully shorthand these market levels as marketplaces (micro), markets of operation (meso) and markets for interests (meta). Rather than general notion of sectoral markets, this schema denotes an overarching market hierarchy consisting of (1) the micrological level at which media marketplaces operate (comprising retail venues, consumers, workers and retailers), (2) the mesological level where media institutions operate (comprising of firms and their suppliers, regulatory bodies and industry/labour associations), (3) the macrological level at which media assets are acquired and organised by apex interests (comprising of holding companies, capital investors, financial entities and government) (see Parthasarathi and Athique, 2020).

Marketplaces, where buyers and sellers engage in the negotiation of price for both products and labour are, in an idealised form, the ideological kernel of liberal economics. In the Indian case, the retail toe of the media is a bewildering bazaar of independent sellers competing upon location, supply and price. The ‘organised sector’ maintained scarcely any presence at this level prior to the 2000s. With the dual advent of malls and mobiles, Reliance began to explore a retail presence here, at least within wealthier urban segments. By contrast, at the meso level of media operations, there has always been robust competition between firms and products, with domains such as film and television notorious for over-production, financial losses and the absence of the corporate oligopolies that mitigate risks in the US system. Through the 2000s, the rapid growth of digital and mobile access, expanding retail infrastructure, inflows of advertising revenue and content bundling by telecoms providers increased the demand for media content as part of the expansion of the market of operations in Indian media. Nonetheless, despite their cultural significance, everyday prominence and prestige, traditional media firms remain small in comparison to, say telecoms companies, that are themselves smaller in turn than technology companies, financial entities or industrial conglomerates. Thus, a set of controlling markets for media interests became constituted around meta-level actors taking and trading interests in the meso market of operations. Essentially, media firms became an attractive product in the higher strata of capital markets that transact ownership, currencies and debt. During the 2000s, these acquisitions in the market for interests prompted discussion of the ‘corporatisation’ of the media economy, even if this did not entail the institution of any actual corporations (see Athique, 2012).

What it did entail was the expansion of the management workforce and of professional roles across the media economy, with Reliance becoming a major employer and sponsor of professional management training. From a structural perspective, Reliance’s ‘corporatisation’ of India’s media economy via acquisitions in film, telecom, broadcasting, and music provides a useful example of how a conglomerate megacorp can envelop a raft of legacy and emergent media businesses in order to control adjacent markets. With the capacity to traverse and/or recast the regulatory and market norms that define ‘single-chain’ media businesses at the meso level, market power at the apex level is achieved through cultural, financial and political processes rather than industrial processes. The consequence of these network capabilities is that Reliance has been able to determine its own status as a dominant player in all formats, regions and strata of India’s media markets. In his analysis of Reliance’s stratagems, Scott Fitzgerald identifies a correspondence between the layering of media markets and Fernand Braudel’s stratified account of global capitalism, where ‘capitalism occupies the top layer of a three-tiered structure, differentiated on the basis of a ‘hierarchy of exchanges’ (Braudel, 1977)’ (2020). Braudel distinguishes between different layers of commerce: the mundane exchanges of everyday life (as a non-economic sphere), the market economy (driven by competition, symmetry and market principles) and the apex domain of capitalism (oligopolistic and organised through patronage). This is where ‘capitalism constitutes contre-marchés or anti-markets’ and where ‘Political power is the crucial mechanism’ since ‘it allows capitalists to operate above the market economy’ (Fitzgerald, 2020).

Infrastructure, information and interests

How does this stratified dynamic then correspond with the sedimentary layers of the far larger mediated economy enabled by digital technologies and business models? To answer this question we need to think of the Internet ‘stack’ as being simultaneously a stack of technologies and a stack of markets (for the former, see Bratton, 2016). In the Western historiography, it has been the commercial potentials of the Internet that have been paramount to the extension of its architecture, with each additional layer of functionality adding new avenues for monetisation (see Athique and Baulch, 2019). In the 1990s, the Internet was understood primarily as a communication apparatus, where profits were extracted principally through sales of personal hardware, software subscriptions, ISP charges and other forms of access rents. Given net neutrality regulations that prevented telecoms providers from controlling Internet markets, the main players were ISPs, Hardware Manufacturers, Operating Systems and Search Engines. These are the domains where Apple, Microsoft and later Google would establish monopolistic positions. By the millennium, as bandwidth increased, media formats were compressed, and online payment and logistics systems were instituted, a distribution market layer was built over the communications layer. Here, value came from content subscriptions, pay-per-view offerings, eCommerce and the bulk of the world’s advertising clients. This is the domain in which Amazon and Alibaba founded their retail empires, and where Google and Facebook came to establish their duopoly over digital advertising.

Over the past decade, the main action has been the development of a transactional market layer. This is a higher strata where profits are taken from the proprietary control of automated markets (such as third party marketplaces and various forms of gig labour), FinTech (such as payment apps, wallets, micro finance, currency trading and gambling), and through the extraction and manipulation of user-data from smartphones. This market layer is dominated by an oligarchy of super platforms that corral their users into walled gardens of software and hardware in order to maximise the cross-subsidisation of their multiple offerings and provide the necessary scale for making data and money fungible (Athique, 2020b). This is the domain of Srnicek’s (2017) ‘platform capitalism’, where Google monetises its monopolies in the communication and distribution layers and where Facebook seeks to leverage its social omniscience to become a global financial institution. It is immediately striking how this stratification of Internet markets also corresponds functionally with the Braudelian hierarchy of exchange (1977). What differs, perhaps, is the evident presence of oligopolies at every level of the system. We could hardly, in our times, see the communication layer as a ‘non-economic’ domain, or the distribution layer as a market of pure and pluralistic competition – although they are perhaps more so relative to the transactional layer. What also needs to be recognised is that the historical accretion of the Western Internet model, however rapid, does not apply to the Asian Internets, where typically all three layers are built simultaneously, and often by the same actors.

Crucially, the expansion of the Internet in Asia has been driven by access to mobile technologies, which necessarily converges the territorial rent-seeking logics of telecoms (with its penchant for lock-ins and predatory pricing) with the proprietary logics of software and hardware providers (targeting, respectively, network effects and economies of scale), and when you complete the triptych with the consumer lure of media content (whose populist logics are driven more by market share than profitability) you have an over-riding strategic imperative for market dominance and anticompetitive behaviour. Equally, the mutual interdependencies of the three domains in the smartphone era naturally predispose their vertical integration from the outset. In most Asian markets there are few significant regulations preventing oligopolistic behaviour amongst infrastructure providers, nor are there specific barriers to establishing positions across all layers of the local Internet. Consequently, in India, each layer of the digital economy is oligopolistic, with the dominant actors currently a mix of US and Indian firms. This cohabitation reflects the fact that India’s oligarchs are closely networked with their Western counterparts, allowing them to broker domestic market access, technology transfers and access to government. This is the context in which Reliance’s partnerships with Facebook, Google and Microsoft constitute commercial partnerships as well as diplomatic transactions (The Wire, 2020). The media economy is similarly oligopolistic, as are key heavy industry domains. Reliance is distinguished within India’s general field of oligopoly because it is one of the three actors that matter in all strategic sectors and at multiple market layers.

Thus, the retail arm of Jio Platforms can be underwritten by the infrastructure contracts, rents and power bills intrinsic to the ambitions of the India Stack (that is, by Reliance Energy and Reliance Infrastructure). Of itself, the market-shaping entry of JioFiber into the communication layer, and the 5G rollout, is entirely consistent with Reliance’s habit of capturing strategic assets in rent-thick sectors (Mukherjee, 2019). At the top of the stack, the simultaneous entry of Jio Platforms into the transactional layer promises new extractive opportunities in data markets, as Mukesh Ambani has said. More critically, however, the bundling of Jio Platforms over the Jio telecoms network, and over JioFiber, provides an opportunity to sandwich the distribution layer of India’s digital economy, since market dominance at both the top and bottom of the stack will allow Reliance to set the rents and the rules for all the third party businesses operating via the Jio ecosystem. The effective endorsement of this approach by the Government of India goes hand in hand with its ambitions to administer India through its own digital ecosystem, piggy-backing on the same infrastructure base. In practice, India’s governance of platforms becomes difficult to separate from the platformisation of governance itself, where the close partnership between Reliance and the state being both functional and ideological. Beyond its constitutional role as the sovereign arbiter of national market, the state has deepening strategic interests in the digital domain (such as ensuring technology transfers, public sector access, policing the public sphere and collecting taxes). Thus, we are compelled to consider the Indian state as variously a gatekeeper, partner, buyer, seller and custodian in the transactional layer of the digital economy.

In many respects, oligopoly in the media economy is a logical consequence of the mixed economy of post-independence developmentalism, which favoured centralised control while reproducing the state’s administrative procedures. In the analogue era, these were ‘paternalistic village broadcasting experiments’, incorporating local idioms of rule and co-opting local authorities towards the centralised programming of ‘participatory democracy’ via ‘rural television’ (marked by programming such as Krishi Darshan, and projects such as Satellite Instructional Television Experiment (1975) and Kheda Communications Project (1975–1990) (Asthana, 2013: 523). Subsequently, the Indian National Satellite System (1983) enacted a state mandate for geographical expansion, re-distributing centre-periphery relations, and introducing market-based consumerism via sponsored commercial programmes (Asthana, 2013: 525–527). The contemporary avatar is the BharatNet programme, intended to utilise the National Optical Fibre Network to provide high-speed broadband connectivity to all gram panchayats (village level administrations). The BharatNet programme is a public-private partnerships (PPP), between public sector units, such as BSNL, Power Grid Corporation and Indian Railways, and key private telecom operators, including Reliance Jio and Airtel. BharatNet consciously extends the liberalisation project in the name of offering parity to rural India in web-based network infrastructure. The swadeshi (self-sufficient) aspects of the programme are much advertised, with the role of ‘national champions’ lending credibility to the project. As a quid pro quo, Reliance’s role in this developmental agenda is compensation for its generally predatory market practice in the wider field of digital transactions.

Ecosystems, ecospheres and extraction

Approaching the functions of the megacorp via the stratification of markets prompts us to consider whether the megacorp is not so much a consequence of an institutional form, but rather that the strategic opportunity of oligopoly inherent to market hierarchies fosters the rise of megacorps in an institutional form suitable to prevailing political and cultural norms. One benefit of such a market-based analysis is to push aside the technological determinism of IT discourse, whereby the favoured strata of ‘hardware layer’, ‘software layer’ and ‘information layer’ wilfully obscures both the strategic context and commercial intent of technology development (not to mention reducing humanity to a data source for system designers). In IT parlance, a general distinction is held between an integrated and interoperable technical infrastructure, the ‘ecosystem’, and everything that constitutes content, the ‘platforms’ (e.g. Vermesan and Friess, 2013). Under this division, businesses, markets and consumers are relegated to the platform domain, thus passing beyond the responsibility of system engineers. However, it is deeply problematic to simply conflate user populations, consumer markets and business empires via this base-superstructure logic, because this elides the purposeful correspondence between the integration of digital markets and the integration of technical function. That, after all, is the imperative that funds technological development in the Internet domain, and which prompts Reliance’s capital investments in India’s Internet infrastructure.

We must also be attentive to how engineering euphemisms are used to legitimise integrated business plans that are essentially blueprints for oligopoly in the digital sector (Gillespie, 2010; Mukherjee, 2019). In business circles, the term ‘ecosystem’ is primarily deployed to rationalise multi-product, multi-market, multi-division business empires using market power to create a walled garden around their customers (e.g. Moore, 1993). In the era of super platforms, the ‘ecosystem’ metaphor is deployed to normalise proprietary cross-sector businesses and customer lock-ins, pushing aside the implications for competition, concentration, regulation and the rights of consumers by fostering the implicit notion that the digital megacorp is technologically inevitable (e.g. Jacobides et al., 2019). The business ecosystem in this precise form is the strategic model that Reliance has adopted wholesale in the constitution of Jio Platforms. The technical necessity of digital enclosures is a fallacy, but they become effectively concretised once a super platform establishes a hegemonic position in the technical infrastructure. To illustrate this outcome in terms of Jio’s top and bottom strategy, we should first clarify the two predominant, but very different, usages of the ecosystem concept:

Technical Ecosystem: The range of interlocking technologies, resources, infrastructures and processes that ensure interoperable platform architecture – including raw materials, energy, buildings, processors, data storage, satellites, sensors, cables, spectrum, algorithms, interface devices, and operating systems.

Business Ecosystem: The interlocking relationships and interdependencies that determine the business environment of digital platforms: including capital and investment interests, company structures, subsidiaries, suppliers, business partners, product ranges, cross-subsidization and tie-ups, market information, workforce, plant, data assets, intellectual property, and market regulators.

These two usages of the metaphor are clearly distinct, but they converge within larger ambitions for the systematic integration of markets via digital technology. Effectively, they become the twin cores of a super platform. The consequence of the dual structuring of the super platform at the retail level is the enclosure of users within the sensory emporium of a super app. This is where Indian customers experience on screen what Tiwary (2020) has called the ‘ecospheres’ of the platform economy. In this instance, the super app is rendered as the expansive suite of Jio Apps pre-loaded onto handsets as a branded universe, backed not only by the market power of the Reliance business ecosystem but also by the technical ecosystem of Jio Platforms. The Jio consumer ecosphere is rendered as a branded and mutually reinforcing assembly of products, services and content using digital affordances to optimise information, consumption and behaviour. Thus, the Jio Apps ecosphere is strategically engaged in the business of consumer persuasion, whilst enabling the Jio Platforms ecosystem to pursue the wholesale extraction of data and profits from social transactions and sociability. Jio Apps is designed to capture consumers by tailoring its interface to suit local tastes and preferences via content creation, product offers and by reshaping the envelope of social communication. In procedural terms, it constitutes simultaneously the retail layer of the business ecosystem and the information layer of the technical ecosystem.

As a consumer envelopment, the Jio ecosphere is evidently a universe created in the image of the megacorp. Ultimately, however, it must be occupied by heterogenous users. It is in this domain that Reliance is reaching beyond its core competencies in securing licences, capital and infrastructure, and this is where the digital venture perhaps becomes less sure-footed. In the minds of much of the public there remains a fundamental schism between the ecosphere of the super app as a polyvalent public square and the ecosystem of the super platform as a proprietary island press-ganging its inhabitants into the data economy. The key issue, perhaps, is the conferral of public trust. For all the things Reliance can buy, an air of innocence is not one of them – its colourful history of regulatory manipulations, eliminating rivals, implanting high-ranking officials and stealing strategic favours weighs too heavily upon the popular perception. Mukesh Ambani’s rhetorical championing of the nation against foreign corporations cannot overwrite the lingering impression that Reliance has always privileged state interests over its customers.

Tryst, trust and anti-trust

Having gone from an adversarial outsider in the 1970s to an entrenched favourite of the Indian government by the 2000s, Reliance has come a long way and, in the process, has gone through multiple reconfigurations. Any question about whether or not Reliance can be categorised as a megacorp under Eichner’s definition is certainly not about doubting its ‘Mega’ size, market power or conglomeration, but has to be about the prerequisite separation between ownership and management, which would likely disqualify Reliance as a genuine corporation (Eichner, 1976). Notwithstanding the headline investments from Facebook and Google, Mukesh Ambani personally holds a 67% stake in Jio Platforms, retaining personal control of all the Reliance businesses save those owned by his younger brother. Consequently, it appears that the separation of ownership and management is not fundamental to the status, function or strategy of a conglomerate oligopoly. Rather, following Braudel, the digital megacorp can be seen as an inevitable consequence of market hierarchies, and, as Fitzgerald notes, the key institutional factor is the licence of the state. Thus, while recognising Mukherjee and Steinberg’s intuition that megacorps (in various forms) are the necessary corollaries to super platforms and super apps, it may also be worth marking the differences between digital oligopolies oriented towards capturing domestic market and those geared towards extra-territorial markets. The latter – mostly Japanese, South Korean and American companies – compete in a global market. The former – Chinese and Indian – remain strategically ‘reliant’ on state licencing (or tacit support), and what Everett Rogers might have called ‘the diffusion of imitations’ (Rogers, 1962).

For now at least, the tryst between Prime Minister Narendra Modi and Reliance chairman, Mukesh Ambani remains central to the Indian state’s political calculus (Kumar, 2020). For Reliance – as the putative rentier of Digital India – this duet of nationalist rhetoric in the face of mightier platform ecosystems from the United States and China, makes a virtue out of necessity. Effectively, the call up of Reliance as India’s ‘national champion’ has been orchestrated to hedge the Indian state’s multiple partnerships with Silicon Valley tech companies. Yet, it may well be that Reliance’s ostentatious entry into the digital economy engenders growing compulsions to move beyond state patronage to accommodate international actors, and to compete in the global digital economy without any commensurate institutional experience of technological innovation in all the most critical areas. Unlike its major domestic competitors, the Tata’s, Reliance’s overseas ventures have not been part of its success story (notwithstanding the extraordinary revelation of ‘bankrupt’ Anil Ambani’s $1.3bn of offshore holdings in the recent leak of the ‘pandora papers’ (see Asia Financial, 2021)). Thus, the dichotomy of Reliance’s styling as a national champion is that while it does add to the Indian state’s muscle in the international arena, it will still rely on Microsoft’s Azure to power the data centre empire being justified by pretensions for India’s digital sovereignty. In this regard, Reliance has been obliged to take its cues from the Indian state which, on one hand, attunes the massive domestic market to the liberal regimes of global capital and, on the other hand, periodically threatens to discipline multinational corporations, whether by punitive tariffs, by banning them altogether, or by regulatory regimes designed to replace them with Indian look-alikes as soon as the necessary technologies and/or inward investments have been acquired (see Thomas, 2019b).

Reliance’s rigged election as India’s digital nominee, and as the most favoured custodian of citizens’ data, continues to be haunted locally by its colourful past as an aggressive oligopoly, and internationally by India’s erratic partnerships with global capital. This is not to underestimate Reliance’s agility and prowess in a digital market that it has almost single-handedly reshaped in such a short space of time. However, unless Whatsapp, Facebook, YouTube and Google – as the prevailing digital public squares – are closed down, any full-blooded migration to Jio’s princely state is unlikely. Even though the surveillance economies operated in India by Google or Facebook are no more ‘free’ than Jio’s loss-leading ecosphere, the former remain ideologically tethered in the public imagination to the liberal promise of private enterprise. By contrast, the freebies offered by Reliance remain visibly tethered to political privilege and the ideological purview of feudalism. This is not to lapse into particularism around the extended family as an economic unit, or any implied backwardness of ‘native capitalism’ in India. The larger point is that the capacity to operate as a fiefdom above market competition always requires the sovereign grant of privileged status, which inevitably comes with obligations to the state. This was true of the great territorial trading companies operating under royal charters, of Eichner’s sugar corporations, of the business houses of India’s erstwhile command economy, and of the exorbitant privileges granted to US technology companies from Clinton to Obama. The megacorp, as an anti-market player, is thus both baron and vassal in the dominion of state-sanctioned capitalism – a point that has been demonstrated forcefully to Chinese platforms over the course of 2021.

If the challenge for Reliance in everyday retail marketplaces is a lack of public trust, then the corresponding threat in the market for interests is anti-trust. Reliance, as the nominated beneficiary of India’s digital charter, must remain attentive to the ambivalent political climate in which it now operates. Unlike textiles, oil and finance, the social economy of platforms is highly visible, volatile and replete with political risks – a lesson slowly being learnt by digital megacorps worldwide. Certainly, Reliance has greater experience, and far more tact, when dealing with state interests than Silicon Valley CEOs, and unlike those companies it could ultimately survive the breakup of digital ecosystems by falling back on its industrial businesses. Nonetheless, Jio’s American competitors can underwrite their Indian data-extraction business with profits from much more lucrative markets and could, if state demands became excessive, simply withdraw from India (as IBM did in the 1970s). India’s national champion will remain transfixed within the domestic market and the vagaries of the state, making it perennially vulnerable to political interference, disfavour, and public interest demands. If India’s data commodity fails in its promise as the new oil, then the profitability of Jio Platforms will have to rely on the declining purchasing power of a relatively poor per capita population, and an economy first hobbled by demonetisation and then crippled by plague. Nonetheless, by the logics of network effects sheer market size may still ensure that Reliance, like India, is simply too big to fail. This is, in essence, the acid test of a megacorp.