The National Company Law Appellate Tribunal (NCLAT) has admitted Meta’s plea challenging a ₹213.14 crore penalty imposed by the Competition Commission of India (CCI) for alleged abuse of market dominance. The tribunal is scheduled to hear Meta’s request for an interim stay on January 23.
“We find that submissions made by the parties need consideration. We admit both appeals. Orders on interim reliefs will be pronounced next Thursday,” stated a bench comprising chairperson Justice Ashok Bhushan and technical member Arun Baroka.
In October, the CCI imposed the penalty on Meta, citing concerns over WhatsApp’s 2021 privacy policy. The policy mandated data sharing between WhatsApp and other Meta entities like Facebook, raising significant concerns about user privacy and market fairness.
The 2021 privacy policy required users to accept expanded data collection and mandatory sharing with Facebook to continue using WhatsApp, removing the opt-out option available under the 2016 policy. The CCI deemed this “take-it-or-leave-it” approach an unfair condition, violating Section 4(2)(a)(i) of the Competition Act, 2002.
At the hearing, Meta and WhatsApp were represented by senior advocates Kapil Sibal and Mukul Rohatgi.
Sibal argued that the regulation of privacy policies and data-sharing practices should fall under the purview of the Digital Personal Data Protection (DPDP) Act, which is expected to become effective by mid-2025.
The advocates further defended Meta’s data-sharing practices, stating that monetising user data is essential for business sustainability. “Just as Google uses search data for ads and Google Maps accesses location data, WhatsApp, while free, cannot operate as a philanthropic entity,” they argued before the tribunal.
The CCI, however, opposed any stay on its order, emphasizing that it could set a dangerous precedent. The regulator highlighted that WhatsApp offers an opt-out feature to users in Europe but insists on the “take-it-or-leave-it” policy in India.
According to the CCI’s order, WhatsApp is prohibited from sharing user data collected on its platform with other Meta entities for advertising purposes for a period of five years.
The commission also found Meta guilty of creating entry barriers for competitors in the online display advertising market by leveraging WhatsApp user data and exploiting its dominance in the messaging app space to strengthen its position in the advertising sector.
