In a concerning development, Facebook parent Meta has said that the WhatsApp user data is its private property and is unwilling to share it with its rivals. In a hearing at the National Company Law Appellate Tribunal (NCLAT), which concerns a Rs 213.14 crore fine imposed on the company by the Competition Commission of India (CCI), Meta has defended its take to share its proprietary user data with its rivals.
The case, which is based on WhatsApp’s controversial 2021 privacy policy, alleges Meta abused its dominant market position. During the proceedings, senior advocate for Meta, Arun Kathpalia, put forward his point that the data collected from WhatsApp users is crucial for improving the company’s technology. He questioned the NCLAT why Meta should be forced to share its proprietary data with rivals, thus fueling the debate between digital privacy and market competition.
WhatsApp’s senior advocate, Kapil Sibal, also contended that the CCI had exceeded its jurisdictional authority and had failed to provide any concrete evidence of consumer harm. “That’s not their jurisdiction. Entire approach of CCI is legally erroneous and outside the purview of Section 4 of the Competition Act,” said Sibal.
WhatsApp-CCI case: What has happened so far
While the NCLAT has refused to put a stay on the penalty, it has granted Meta a temporary reprieve on a more severe aspect of the CCI’s order. The tribunal retains the five-year ban on data-sharing practices, acknowledging that enforcing the CCI’s order could effectively lead to a collapse of WhatsApp’s business model.
To proceed with the case, the NCLAT has directed Meta to deposit 50 per cent of the fine, with 25 per cent already paid.
On the other hand, the tribunal upheld other parts of the CCI’s order, compelling WhatsApp to take several measures to increase transparency and user control. These measures include clarifying what user data is being shared with Meta. Additionally, WhatsApp needs to ensure that data sharing is not a mandatory condition for using WhatsApp services. The app also needs to provide users with an opt-out option.
How the NCLAT outcome could affect you
The legal battle between CCI and Meta has evolved into a complex one, with the outcome influenced by the new Digital Personal Data Protection (DPDP) Rules.
If the tribunal’s decision favours the CCI, Meta would need to share its user data with its rivals, thus encouraging rival texting services to utilise the data and come up with better sources to challenge the supremacy of the chat app. For the consumer, this could translate to more options in the text messaging space.
On the other hand, if the outcome favours Meta and WhatsApp, it could give the most popular texting service a fair chance to retain its lead and develop its products, while raising questions on transparency and user data privacy.