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Informist, Thursday, Jan. 23, 2025

 

--NCLAT stays CCI order asking WhatsApp to not share data with Meta cos 

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

--NCLAT stays CCI's penalty on Meta subject to depositing 50% of penalty 

--CONTEXT: CCI barred WhatsApp from sharing user data with Meta cos for 5 yrs 

 

NEW DELHI – The National Company Law Appellate Tribunal on Thursday stayed the Competition Commission of India's order asking WhatsApp LLC not to share user data collected on its platform with Meta Platforms, Inc. or other Meta companies for advertising purposes for a period of five years. A ban of five years will lead to the collapse of the business model followed by WhatsApp, the appellate tribunal said. "We have also noticed that WhatsApp is providing WhatsApp services to users free of cost," said the appellate tribunal. 

 

Further, the appellate tribunal stayed 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 the case related to WhatsApp LLC's 2021 privacy policy, subject to Meta depositing 50% of the fine amount. It asked Meta to deposit the amount within two weeks. The appellate tribunal refused to stay any other directions issued by the competition watchdog in its order. 

 

"Both the parties are granted leave to seek modification of the order in the event the Digital Personal Data Protection Act, 2023 is enforced or any other statutory provisions are enforced regarding the data protection and sharing of the data," said the bench of judicial member Justice Ashok Bhushan and technical member Arun Baroka. The appellate tribunal said that looking at the nature of issues raised in the appeal, it needs to be decided at an early date. The appellate tribunal placed the matter for hearing on Mar. 17.

 

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. 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 had said. All future policy updates would also have to comply with these requirements, it added.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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