CCI claims WhatsApp abused dominant position with 'take-it-or-leave-it' policy

The Competition Commission of India (CCI) told the National Company Law Appellate Tribunal (NCLAT) that Meta's size and integration of its platforms—Facebook, Instagram, Messenger, and WhatsApp place it far ahead of competitors, making WhatsApp the dominant player in India's messaging app market.

Appearing for the CCI, Senior Advocate Balbir Singh argued that no other player comes close to WhatsApp in terms of user dependence, network effects, and cross-platform synergy.

"WhatsApp's reach and daily engagement levels, reinforced by powerful network effects, ensure that users remain locked into the service," Singh said. He added that even if users install other apps like Telegram and Signal, activity remains concentrated on WhatsApp because switching requires convincing an entire network of contacts to migrate.

Singh asserted that this dominance was abused when WhatsApp imposed its 2021 privacy policy on a "take it or leave it" basis. He described the notifications as creating a "manufactured sense of urgency," which left users with little choice but to comply out of fear of losing access to the service.

The senior advocate also highlighted that the 2021 policy removed a limited opt-out safeguard that had existed previously, compelling users who had once rejected cross-platform data sharing to accept it. Singh called the policy a "textbook case of exploitative abuse," explaining that it authorized broad data collection that went beyond what was necessary for the service and allowed the data to be integrated across Meta’s ecosystem.

Singh also pointed out a disparity in treatment between Indian users and those in the European Union, who have stronger rights, such as the ability to rectify or erase their data. "The absence of similar protections in India demonstrated that WhatsApp had deliberately chosen to deny Indian consumers the same level of transparency and control," he stated.

Countering Meta's claim that the case falls under data protection law, Singh argued that "privacy is a recognized dimension of competition" in digital markets. He explained that since many services are offered at no monetary cost, "data itself becomes the price," making a reduction in privacy equivalent to a decline in service quality. Singh said competition law and data protection law play complementary roles and that excluding privacy from competition analysis would leave large parts of the digital economy unregulated.

The CCI had previously imposed a ₹213.14 crore penalty on Meta in November 2024, finding that the "take-it-or-leave-it" approach of the 2021 policy constituted an abuse of dominance under the Competition Act, 2002. The CCI's order also directed WhatsApp not to share user data with Meta for five years and to specify the purpose of all data collected.

WhatsApp and Meta have challenged the order, and in January 2025, the NCLAT stayed both the penalty and the data-sharing ban, stating that the ban could "lead to the collapse of the business model of WhatsApp LLC." The penalty was stayed on the condition that WhatsApp/Meta deposit 50 percent of the amount.

Senior Advocates Kapil Sibal, Mukul Rohatgi, Arun Kathpalia, and Amit Sibal previously made submissions on behalf of Meta and WhatsApp. Kathpalia is scheduled to make his rejoinder arguments on Thursday.

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