8 hours Ago By Sakshi Sadashiv K
The National Company Law Appellate Tribunal (NCLAT), during a hearing on January 23, stayed the Competition Commission of India’s (CCI) directive prohibiting WhatsApp from sharing user data with Meta for advertising purposes over the next five years. The tribunal also directed WhatsApp to deposit 50% of the Rs 213.14 crore penalty imposed by the CCI within two weeks.
“Ban of 5 years may lead to the collapse of the business model of WhatsApp LLC since the platform is free. We are of the view that a ban of 5 years needs to be stayed,” the bench stated. However, the CCI’s directives regarding the following have yet to reach a final conclusion: Background The Competition Commission of India (CCI) imposed a penalty of Rs 213.
14 crore on Meta for anti-competitive practices related to WhatsApp’s 2021 privacy policy update. The 2021 privacy policy update mandated expanded data collection and sharing with Meta companies, compelling users to accept the terms to continue using WhatsApp. This was seen as coercive and anti-competitive, exploiting WhatsApp’s dominance to benefit Meta’s advertising strategy while disadvantaging competitors and limiting user choice.
CCI found this practice violated India’s competition laws, creating unfair market conditions. The policy undermined competition by leveraging WhatsApp’s dominance in messaging and advertising markets, and CCI imposed a penalty on Meta, along with directives to prevent further abuse of its dominant position and ensure more transparent user data-sharing practices. In its assessment, the CCI identified two key markets: The CCI concluded that Meta, via WhatsApp, held dominant positions in both markets, surpassing its competitors.
Advocates appearing for CCI in court contended that Indian users lack the option to opt out of WhatsApp’s 2021 privacy policy update, unlike users in Europe. Why it Matters India is Meta’s largest market, with WhatsApp being central to its operations, with over 500 million users. The stay order in the CCI vs Meta case is significant because it temporarily halts the implementation of the directives, giving Meta time to appeal the decision.
The outcome of the case will shape how WhatsApp navigates regulatory controls in India, which is crucial for Meta’s broader strategy to monetize the platform, especially through business integrations and user interactions. Read More: Support our journalism: For You.
