On Thursday, the National Company Law Appellate Tribunal (NCLAT) acknowledged the petitions submitted by Meta Platforms and WhatsApp, challenging a decision from the Competition Commission of India (CCI). The CCI had previously imposed a penalty of ₹213.14 crore for alleged abuse of market dominance. Following initial arguments from both Meta and the CCI, a two-member panel of the NCLAT stated that the matter requires further examination.
The NCLAT bench, which included Chairperson Justice Ashok Bhushan, declared, “We find that the submission raised by the parties needs consideration. We admit both the appeals.” However, the tribunal indicated that it would make a decision regarding the interim relief to stay the CCI’s order in the following week.
During the hearings, legal representatives for WhatsApp and Meta Platforms urged the NCLAT to suspend the CCI’s ruling, though this request was met with opposition from the CCI’s counsel. On November 18, the CCI had penalised Meta, citing unfair business practices linked to an update in WhatsApp’s privacy policy from 2021.
Meta Platforms and WhatsApp are contesting this ruling before the NCLAT, which acts as an appellate authority over CCI decisions. Senior Advocates Kapil Sibal and Mukul Rohatgi, representing Meta and WhatsApp, argued that the CCI had overstepped its authority by addressing WhatsApp’s privacy policy, given that the matter is currently under review by a Constitution Bench of the Supreme Court.
Sibal asserted, “The CCI has intervened in an entity’s privacy policy that is already before five Supreme Court judges. It lacks jurisdiction over this issue.” Additionally, he highlighted that there has been no formal complaint and that the CCI arrived at an “erroneous conclusion” regarding market dominance without conducting an appropriate ‘effect analysis.’
He further pointed out that the CCI had prohibited WhatsApp from sharing data gathered on its platform with other Meta entities for marketing purposes for a duration of five years, describing this as an attempt to undermine the business model. Sibal remarked, “No application can thrive without monetisation,” emphasising that similar platforms like Telegram and Signal have developed their own monetisation strategies.
He requested an immediate stay on the CCI’s order, which is mandated to take effect by February 19. Sibal argued, “Allow the Supreme Court to adjudicate on the privacy policy and let the legislative framework be established, then the NCLAT can properly assess the situation. The balance of convenience lies with us, as we’ve been functioning under this model for several years.”
Mukul Rohatgi, representing WhatsApp, noted that the service is free for users, who exchange messages ranging from ‘Good Morning to Good Night’, including video exchanges, without any fees. He questioned the viability of a free model stating, “This is merely a business model. Facebook and WhatsApp have been under unified ownership since 2016, and their data sharing is not malevolent.”
On the other hand, Advocate Samar Bansal, representing the CCI, refuted these claims, arguing that there is no relationship between the ongoing Supreme Court case and the CCI’s investigation. In response to a question from the bench, he clarified that data privacy laws focus on personal data, while competition laws are concerned with business data.
Bansal further explained that, distinct from Europe, Indian users currently do not have the freedom to opt out. In the European Union, WhatsApp’s privacy policy allows users various rights concerning their data, including access, correction, and deletion rights, as well as the ability to restrict or object to the processing of their data.
In its extensive 156-page order, the CCI directed Meta to halt any anti-competitive practices. The CCI also instructed Meta and WhatsApp to adopt certain behavioural remedies within a designated timeline to rectify competition-related issues. Among the measures mandated, the CCI has forbidden WhatsApp from sharing user data collected on its platform with other Meta companies for any advertising objectives for a period of five years. Furthermore, the CCI asserted that access to WhatsApp services in India shall not be contingent upon the sharing of user data with other Meta products.