The National Company Law Appellate Tribunal (NCLAT) has admitted Meta’s appeal against a ₹213.14 crore penalty imposed by the Competition Commission of India (CCI) for alleged abuse of market dominance. The tribunal will hear Meta’s request for an interim stay on the penalty on January 23.
A bench consisting of Justice Ashok Bhushan and technical member Arun Baroka noted that the submissions made by both parties require further consideration. “We admit both appeals. Orders on interim reliefs will be pronounced next Thursday,” the bench stated.
In October 2023, the CCI had imposed the fine on Meta, citing concerns over WhatsApp‘s 2021 privacy policy. The policy, which mandated the sharing of user data between WhatsApp and other Meta entities like Facebook, raised alarms regarding user privacy and fairness in the market.
Under the 2021 policy, users were required to accept expanded data collection and sharing with Facebook in order to continue using WhatsApp. The update removed the opt-out option that had been available in the previous 2016 policy. The CCI argued that this “take-it-or-leave-it” approach was unfair and violated Section 4(2)(a)(i) of the Competition Act, 2002.
During the hearing, Meta and WhatsApp were represented by senior advocates Kapil Sibal and Mukul Rohatgi. Sibal contended that regulations around privacy policies and data-sharing practices should fall under the scope of the Digital Personal Data Protection (DPDP) Act, which is expected to come into force by mid-2025.
The legal team also defended Meta’s data-sharing practices, arguing that monetising user data is essential for the company’s business model. “Just as Google uses search data for advertisements and Google Maps accesses location data, WhatsApp, while offering its service for free, cannot operate as a philanthropic entity,” Sibal argued before the tribunal.
The CCI, however, opposed any interim stay on its order, warning that it could set a dangerous precedent. The regulator emphasised that while WhatsApp allows users in Europe to opt out of data-sharing, it insists on the “take-it-or-leave-it” policy in India, which it considers an unfair market practice.
In its ruling, the CCI also imposed a five-year ban on WhatsApp’s practice of sharing user data with other Meta entities for advertising purposes. Additionally, the CCI found Meta to be in violation of competition laws, concluding that the company had used its dominance in the messaging app space to create entry barriers for competitors in the online display advertising market.
The outcome of the NCLAT’s hearing on January 23 will be closely watched, as it could have significant implications for Meta’s operations in India and the broader tech industry.
