Meta challenges CCI's Rs 213-crore penalty over WhatsApp privacy update

Meta Platforms Inc. (formerly Facebook Inc.) on Monday filed an appeal before the National Company Law Appellate Tribunal (NCLAT) against the Competition Commission of India's (CCI) penalty of Rs 213.1 crore, as per reports.

The penalty was imposed in November 2022 for what the CCI termed "abuse of dominant position" by WhatsApp in rolling out its 2021 privacy policy.

Senior counsels Kapil Sibal and Mukul Rohatgi, appearing virtually for Meta, requested an urgent hearing, arguing that the CCI's order had "wide ramifications for the industry as a whole." Accepting their plea, the NCLAT fixed the matter for hearing on January 16.

Last year, the CCI issued the cease-and-desist order and directed Meta and WhatsApp to adopt certain behavioural remedies within a defined timeline.

Its investigation found that the 2021 policy update was imposed on a 'take-it-or-leave-it' basis and compelled WhatsApp's large user base to accept and expanded data-sharing arrangement with other Meta companies without offering an effective opt-out.

Additionally, the CCI observed that by collecting and sharing WhatsApp user data with other Meta entities, the company impeded rival firms from competing effectively in both the Over-The-Top (OTT) messaging market and the online display advertising market. The regulator determined these actions breached Section 4(2)(c) and Section 4(2)(e) of the Act.

Among the key directives, WhatsApp has been told not to share user data collected on its platform with other Meta companies for advertising purposes for five years, the report added.

Beyond that period, WhatsApp must provide a thorough justification for any data-sharing with Meta’s subsidiaries, and such sharing should not be made a condition for WhatsApp services.

All Indian users, including those who have already accepted the 2021 update, will also be given the option to opt out of data-sharing via an in-app notification.