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

The CCI had in November 2024 imposed a penalty of ₹213 crore on Meta for WhatsApp’s 2021 Privacy Policy.

By  Storyboard18Jan 23, 2025 7:33 PM
NCLAT gives relief to Meta, stays CCI order of five-year ban on WhatsApp data sharing
NCLAT noted that WhatsApp is free of cost and that a five-year year ban on WhatsApp from sharing user data with Meta may lead to collapse of the business model.

The National Company Law Appellate Tribunal (NCLAT) on Thursday stayed the order of Competition Commission of India (CCI) which had directed WhatsApp to not share data collected on its platforms with Meta company or its products for five years.

NCLAT noted that WhatsApp is free of cost and that a five-year year ban on WhatsApp from sharing user data with Meta may lead to collapse of the business model. NCLAT admitted the matter, after hearing the preliminary submission from both parties on January 16.

NCLAT coram of Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka remarked, "Ban of 5 years may lead to the collapse of business model of WhatsApp LLC since the platform is free. We are of the view that ban of 5 years need to be stayed."

Commenting on the development, Murugavel Janakiraman, CEO & Founder, Matrimony.com says, "The decision of the NCLAT on Meta’s appeal against the ban imposed by the CCI on WhatsApp’s data sharing policies underscores the limitations of the existing ex-post nature of the competition law and highlights the need for ex-ante regulations. Ex-ante rules restricting ‘data usage’ as proposed in the draft Digital Competition Bill can go a long way in preventing large digital platforms/gatekeepers from abusing their dominant position sometimes even to the disadvantage of the end-users."

The CCI had in November 2024 imposed a penalty of ₹213 crore on Meta for WhatsApp’s 2021 Privacy Policy. The competition regulatory body had restrained WhatsApp from sharing user data with Meta for five years. It also had directed WhatsApp and Meta to “cease and desist” all anti-competitive practices.

WhatsApp’s 2021 Privacy Policy allows for user data to be shared with group cos like Meta, Insta without “opt out” option.

A Meta spokesperson welcomed the NCLAT’s decision and said the firm will evaluate next steps. “Our focus remains on finding a path forward that supports millions of businesses that depend on our platform for growth and innovation as well as providing high-quality experiences that people expect from WhatsApp.”

NCLAT stressed the need to decide the case at an early date, considering the nature of the issues raised in the appeal. "We grant leave to the parties to complete the necessary reading within six weeks from today. Let's list both the appeals for the hearing on 17th March at 2 pm," NCLAT while listing the matter for hearing on March 25.

First Published on Jan 23, 2025 12:57 PM

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