CCI asks NCLAT to clarify WhatsApp-Meta data sharing for ads after ban lift

The Competition Commission of India (CCI) has approached the National Company Law Appellate Tribunal (NCLAT), seeking clarification on the use of user data by WhatsApp for advertising purposes with its parent company Meta.

The move comes shortly after the NCLAT's final judgment on November 4, which upheld a fine and several behavioral remedies against Meta and WhatsApp but lifted a five-year bar on sharing user data for advertising.

In its November 18 application, the CCI highlighted portions of the NCLAT ruling emphasizing user consent, transparency, and a unified consent framework. The regulator is asking the tribunal to clarify whether these privacy safeguards apply uniformly to all categories of data, including information shared for advertising, or if ad-related data can be treated differently. The commission fears the judgment's language might be interpreted to mean that a common consent architecture negates any distinction between advertising and non-advertising uses of data.

The dispute stems from WhatsApp's controversial 2021 privacy policy update, which removed the option for users to opt out of data sharing with Meta group entities. The CCI opened a suo motu investigation, concluding in November 2024 that the policy constituted an abuse of dominance in the messaging market, imposing a Rs 213.14 crore penalty and the now-lifted five-year data-sharing restraint.

The NCLAT's November 4 final order affirmed the penalty and the CCI’s competency to examine anti-competitive conduct related to data and privacy. However, it set aside the blanket prohibition on data sharing for advertising, reasoning that such a ban is unwarranted if users are provided meaningful opt-in and opt-out mechanisms and adequate transparency. The tribunal did not endorse the CCI's finding that Meta leveraged WhatsApp's dominance to strengthen its online advertising business.

A bench comprising NCLAT Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka has issued notice on the CCI's clarification plea, granting Meta and WhatsApp time to file a response. The next hearing is scheduled for December 2. Separately, the tribunal is also considering an application by Meta and WhatsApp to redact confidential parts of the November 4 judgment.

During the hearing, senior advocates representing Meta and WhatsApp opposed the clarification plea, arguing that the November 4 judgment was clear and left no ambiguity. The CCI, however, has requested that the NCLAT resolve its plea before any appeal is filed with the Supreme Court, to ensure the questions raised remain relevant. The litigation underscores the ongoing regulatory debate on integrating competition law with emerging data privacy norms in India.