Abuse of Dominant Position
Meta Platforms challenges CCI INR-2-bln fine in privacy policy case in NCLAT
This story was originally published at 12:23 IST on 6 January 2025
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NEW DELHI – Meta Platforms, Inc. on Monday moved the National Company Law Appellate Tribunal against the Competition Commission of India's November order to impose a penalty of INR 2.1 billion for abusing its dominant position in a case related to WhatsApp LLC's 2021 privacy policy. The antitrust watchdog had also issued cease-and-desist directions to Meta Platforms and WhatsApp, and asked them to implement certain behavioural remedies within a defined timeline.
Advocate Kapil Sibal and Mukul Rohatgi, appearing for Meta and WhatsApp, respectively, asked the appellate tribunal to urgently list the case for hearing on Jan. 16. Agreeing to their request, the appellate tribunal placed the matter on Jan. 16.
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 included data sharing with Meta to continue using the platform.
The Competition Commission, in its order, 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. It was found that Meta held a leading position compared to its competitors in online display advertising in India, said the Competition Commission.
The antitrust watchdog had concluded that the 2021 policy update by WhatsApp on a 'take it-or-leave-it' basis constituted 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 option. Given the network effects and lack of effective alternatives, the 2021 update forced users to comply, undermining their autonomy, and constituted an abuse of Meta's dominant position, the Commission said. "Accordingly, the commission finds that Meta (through WhatsApp) has contravened Section 4(2)(a)(i) of the Act," the commission added.
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 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. On 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 Akul Nishant Akhoury
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