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Informist, Monday, Nov. 18, 2024

 

--CCI fines Meta for abusing dominant position in 2021 privacy policy update 

--CCI imposes monetary penalty of INR 2.1 bln on Meta 

 

NEW DELHI – The Competition Commission of India on Monday imposed a penalty of INR 2.1 bln rupees on Meta for abusing its dominant position in a case related to WhatsApp's 2021 privacy policy. The antitrust watchdog also issued cease-and-desist directions to Meta and WhatsApp and asked them to implement certain behavioural remedies within a defined timeline.

 

The Competition Commission said that Meta group, operating through WhatsApp, was found to be dominant in the market for over-the-top messaging apps through smartphones in India. Furthermore, it was found that Meta holds a leading position compared to its competitors in online display advertising in India, said the Competition Commission.

 

The case has its genesis from WhatsApp's update in January 2021, where it notified users about updates to its terms of service and privacy policies. The notification on Whatsapp said that users were required to accept these terms, including expanded scope of data collection, as well as mandatory data sharing with Meta companies, to continue using WhatsApp.  

 

Under the previous privacy policy in 2016, WhatsApp users were given the option to decide whether they wanted to share their data with Facebook. However, with the latest policy update in 2021, WhatsApp made data sharing with Meta mandatory for all users, removing the earlier option to opt out. This meant that users had to accept the new terms, which include data sharing with Meta, in order to continue using the platform.

 

On Monday, the competition watchdog concluded that the 2021 policy update by WhatsApp on a 'take it-or-leave-it' basis constitutes an imposition of unfair conditions under the Competition Act, as it compels all users to accept expanded data collection terms and sharing of data within Meta Group without any opt out. Given the network effects and lack of effective alternatives, the 2021 update forces users to comply, undermining their autonomy, and constitutes an abuse of Meta's dominant position, said the Commission. "Accordingly, the Commission finds that Meta (through WhatsApp) has contravened Section 4(2)(a)(i) of the Act," the Commission added.

 

On the question of sharing of data between Meta companies, the Commission said it creates an entry barrier for the rivals of Meta and thus, results in denial of market access in the display advertisement market, in contravention of the Competition Act. Meta has engaged in leveraging its dominant position in the over-the-top messaging apps through smartphones to protect its position in the online display advertising market and the same is in contravention of the Act, said the Commission.

 

The antitrust watchdog directed WhatsApp not to share user data collected on its platform with other Meta companies or Meta company products for advertising purposes, for a period of 5 years from the date of receipt of the order. With respect to sharing of WhatsApp user data for purposes other than advertising, the Commission said its policy should include a detailed explanation of the user data shared with other Meta Companies. This explanation should specify the purpose of data sharing, linking each type of data to its corresponding purpose, said the Commission. 

 

Sharing of user data collected on WhatsApp with other Meta companies for purposes other than for providing WhatsApp services shall not be made a condition for users to access WhatsApp Service in India, said the Commission, said the Commission. In respect of sharing of WhatsApp user data for purposes other than for providing WhatsApp Services, all users in India will be provided with the choice to manage such data sharing by way of an opt-out option prominently through an in-app notification; and the option to review and modify their choice with respect to such sharing of data through a prominent tab in settings of WhatsApp application, said the Commission. All future policy updates shall also comply with these requirements, it added.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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