NCLAT partly quashes CCI order against Meta, lifts data-sharing ban on WhatsApp

The National Company Law Appellate Tribunal (NCLAT) on Tuesday provided partial relief to Meta Platforms Inc. and its subsidiary WhatsApp, setting aside key directions issued by the Competition Commission of India (CCI) that had barred the messaging app from sharing user data with Meta group companies for advertising purposes, Bar and Bench reported.

A Bench comprising Justice (retd) Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) also overturned the CCI’s finding that Meta had leveraged its dominant position in the over-the-top (OTT) messaging space to protect its dominance in online display advertising.

However, the Tribunal upheld the Rs 213.14 crore penalty imposed by the CCI in November 2024 after concluding that WhatsApp’s 2021 privacy policy amounted to abuse of dominance. The CCI had found the platform’s “take-it-or-leave-it” policy update unfair and detrimental to user autonomy under provisions of the Competition Act, 2002.

The Commission’s earlier order had also directed WhatsApp to cease sharing user data with Meta or its affiliates for five years, and to ensure transparency by specifying the purpose of each data category collected. It further required that data-sharing could not be a precondition for accessing WhatsApp services in India.

Meta and WhatsApp challenged the order before the NCLAT. In January 2025, the Tribunal stayed both the penalty and the five-year data-sharing ban, observing that the latter could “lead to the collapse of WhatsApp’s business model,” given that the app operates as a free service. The stay on the penalty was conditional on Meta depositing 50% of the fine.

Appearing for Meta, Senior Advocate Amit Sibal argued that the CCI’s conclusions were based on “exaggerations and speculation.” He maintained that user data was not shared with Meta for advertising, except in limited, optional contexts such as the “Click to WhatsApp” feature, where users were shown a transparency screen and retained choice.

In contrast, Senior Advocate Balbir Singh, representing the CCI, argued that Meta’s size, resources, and cross-platform integration across Facebook, Instagram, Messenger and WhatsApp entrenched its dominance in India’s messaging market.

“No other player comes close in terms of user dependence, network effects, and cross-platform synergy,” Singh said, adding that WhatsApp’s 2021 policy exploited this dominance by forcing users to accept new terms under the threat of losing access to a vital communication tool.

The NCLAT’s verdict marks a significant development in Meta’s ongoing battle with Indian regulators over data privacy, competition, and user consent, a debate that continues to shape the contours of digital platform governance in India.