Meta defends WhatsApp data as 'private property' in NCLAT hearing

Meta Platforms on Thursday told the National Company Law Appellate Tribunal (NCLAT) that user data collected from WhatsApp belongs exclusively to the company and is integral to enhancing its technology, as per media reports.

The argument came during a hearing on the Competition Commission of India (CCI) order imposing a fine of Rs 213.14 crore on the tech giant for alleged abuse of its dominant position through WhatsApp's 2021 privacy policy.

Also Read: NCLAT gives relief to Meta, stays CCI order of five-year ban on WhatsApp data sharing

"By leveraging user data from WhatsApp, Meta can enhance its technology. It's (user data) collected by me, it's my personal property. Shall I give it to my competitors?," senior advocate Arun Kathpalia, representing Meta, told the tribunal, as per reports.

Meta and WhatsApp also challenged the CCI's order, which not only imposed the penalty but also directed a five-year ban on the company's data-sharing practices in India.

The NCLAT, however, stayed the ban, observing in a January order that such a restriction could collapse WhatsApp's business model since the service is free for users.

Senior advocate Kapil Sibal, appearing for WhatsApp, argued that the CCI had overstepped its jurisdiction. "That's not their jurisdiction. Entire approach of CCI is legally erroneous and outside the purview of Section 4 of the Competition Act," Sibal reportedly said, adding that no evidence or surveys were presented to establish consumer harm.

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The tribunal, while offering partial relief, refused to stay the penalty.

Meta has been directed to deposit 50% of the fine within two weeks to secure a stay, having already paid 25%. If it prevails in the case, the amount will be refunded.

Meanwhile, NCLAT upheld other parts of the CCI order requiring WhatsApp to clarify what user data is shared with Meta, ensure that data-sharing beyond WhatsApp services is not mandatory, and provide users with an opt-out option.

Users must also be able to modify their choice through app settings, with future privacy policy updates reflecting these requirements.

The case has also been deferred earlier due to the pending Digital Personal Data Protection (DPDP) Rules, which are expected to be notified later this year, reports added.

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