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Informist, Thursday, Jan. 16, 2025

 

--NCLAT admits Meta's appeal against CCI order in privacy policy case 

--CONTEXT: Meta challenged CCI's INR-2-bln fine on co in privacy policy case 

--NCLAT to decide on Meta's plea to stay CCI order on Jan 23 

 

NEW DELHI – The National Company Law Appellate Tribunal on Thursday admitted an appeal filed by Meta Platforms, Inc. and WhatsApp LLC against the Competition Commission of India's November order to impose a penalty of INR 2.1 billion on Meta for abusing its dominant position in a case related to WhatsApp LLC's 2021 privacy policy. The appellate tribunal said it would pass an order on Jan 23 on Meta and WhatsApp seeking a stay on the competition watchdog's order.

 

The petitioners have sought a stay on the commission's order to direct 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 five years from the date of receipt of the order. With respect to sharing WhatsApp user data for purposes other than advertising, the commission had 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, the commission had said. 

 

Sharing of user data collected on WhatsApp with other Meta companies for purposes other than providing WhatsApp services would not be made a condition for users to access WhatsApp Service in India, the commission had said. On sharing of WhatsApp user data for purposes other than providing WhatsApp services, all users in India would be provided 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, the commission said. All future policy updates would also have to comply with these requirements, it added.

 

Appearing for Meta, advocate Kapil Sibal said that there was no complainant in the case dealt by the competition watchdog and the latter took the issue suo moto. The antitrust body had not examined the data to be shared. "CCI says for the next five years you (WhatsApp) will not share anything (data). I (WhatsApp) have a business model, they are destroying the business model," Sibal said. He said the competition watchdog's order has "absolutely far-reaching implications" in several dimensions. The commission had gone into the privacy policy of the entity, whose challenge was before the Supreme Court, said Sibal. He said India's data privacy law would come into effect in the middle of 2025 and the competition watchdog's order would bear no meaning since the dispute would be governed by the privacy law.

 

Appearing for WhatsApp, advocate Mukul Rohatgi said the impact of the commission's order infringed upon the field of privacy. WhatsApp also has to earn some revenue, Rohatgi said, adding "nobody can survive on a free model".

 

Advocate Samar Bansal, appearing for the competition watchdog, contested Meta and WhatsApp's demand to stay the commission's order. Bansal said there was no overlap between the apex court case and the competition watchdog's probe. "Data privacy law (the Digital Personal Data Protection Act, 2023) will only look at personal data, competition law looks at business data. Indian users do not have an opt-out policy; it's not the same case with Europe," said Bansal.

 

The case has its genesis in an update by WhatsApp in January 2021, through which it notified users about updates to its terms of service and privacy policies. The notification on WhatsApp said 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 users had to accept the new terms, which included data sharing with Meta, to continue using the platform.

 

In its order, 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. It was found that Meta held a leading position compared to its competitors in online display advertising in India, the commission said.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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