Setback for Meta: NCLAT orders WhatsApp to comply with CCI on user data choice
NCLAT has ruled that despite setting aside a five-year ban on data sharing, WhatsApp must comply with CCI safeguards that ensure user consent, transparency and control over data shared with Meta.
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The National Company Law Appellate Tribunal has clarified that WhatsApp must comply with regulatory safeguards requiring the messaging service to give users greater control over whether their data is shared with other Meta platforms, even as it earlier set aside a sweeping ban on such data sharing.
In an order issued on Monday, the NCLAT said that its recent ruling overturning a five-year prohibition imposed by the Competition Commission of India on data sharing for advertising purposes did not dispense with the core requirement of user choice. The tribunal said WhatsApp remained obligated to allow users to opt in or out of data sharing and to explain how their data is used.
The clarification came after the competition regulator sought relief from the tribunal, arguing that key consumer safeguards had been inadvertently nullified when the court overturned parts of the regulator’s earlier order. The bench, led by Justice Ashok Bhushan, the tribunal’s chairperson, and Arun Baroka, a technical member, rejected objections from WhatsApp and its parent company, Meta, that the regulator was effectively seeking a review of the court’s judgment.
The tribunal said it retained the authority to clarify its ruling and emphasized that its earlier decision had consistently underscored the importance of preserving user autonomy.
In its November 4 ruling, the appellate tribunal had set aside the regulator’s five-year ban on WhatsApp sharing user data with other Meta companies for advertising. It also overturned certain remedial directions, including a requirement that data sharing not be made a condition for access to WhatsApp’s services in India.
Read more: NCLAT allows Meta, WhatsApp to redact confidential data from CCI penalty judgment
The Competition Commission argued that those remedial directions — including provisions allowing users to opt out of data sharing, review and modify their choices, and receive detailed explanations of what data is shared and for what purpose — were intended to remain in force. Without them, the regulator said, WhatsApp would be exempted from basic transparency obligations.
WhatsApp and Meta countered that users already had the ability to avoid advertising-related features and said the regulator’s application amounted to a backdoor attempt to reopen the case.
The tribunal disagreed. It said that removing the safeguards would undermine the central objective of preventing user exploitation and restoring meaningful choice. Allowing unrestricted data sharing without explanation, it added, would deny users the ability to decide what data is collected, how it is used and for how long, and would weaken the principle that non-essential data use, including for advertising, requires express and revocable consent.
The tribunal concluded that the operative portion of its earlier judgment was not fully aligned with its findings and restored the Competition Commission’s remedial directions governing WhatsApp’s collection and sharing of user data for non-WhatsApp purposes, including both advertising and non-advertising uses.
It granted WhatsApp three months to make the necessary changes to comply with the directions.
The clarification is the latest development in a prolonged legal battle that began in November 2024, when the Competition Commission imposed a penalty of ₹213.14 crore on Meta. The regulator found that WhatsApp’s 2021 privacy policy update amounted to an abuse of dominance, citing a “take-it-or-leave-it” approach that imposed unfair conditions on users and undermined their autonomy in violation of the Competition Act, 2002.
