Due to the WhatsApp policy, CCI Fines Meta

Nitin Konde, Varun Bhardwaj

Nov 20, 2024 — 3 min read

CCI Imposes Fine on Meta Over WhatsApp Policy Issues

The Competition Commission of India hit WhatsApp and its parent company Meta with an INR 213.14 crore (roughly USD 25.3 million) fine on 17 November for violating the Competition Act and abusing its dominant position through the 2021 update to WhatsApp's privacy policy. WhatsApp has been directed by the CCI to refrain from sharing user data for advertising reasons with other Meta firms (like Facebook and Instagram) for a period of five years.

Additionally, the CCI has prohibited WhatsApp from requiring user data sharing with Meta firms in order to utilise its services in India. WhatsApp's policy must outline the kind of data that is provided and the reasons behind them when it comes to Meta companies and goods for purposes other than advertising. Users of WhatsApp must be given the option to opt out of data sharing and change their preferences in-app if their data is shared for purposes other than delivering WhatsApp services. All users, including those who approved the 2021 upgrade, must have access to this option.

Online Network of WhatsApp and Meta Companies

The CCI claimed in a press release that WhatsApp's 2021 policy change, which eliminated the previous opt-out option and required users to agree to the new terms, including data sharing with Meta, was an "unfair condition" under the Competition Act.

According to the report, all users were forced to "accept expanded data collection terms and sharing of data within Meta Group without any opt-out" as a result of the update. It claimed that the policy update compelled users to comply, weakened their autonomy, and indicated that Meta had exploited its dominating position due to the network effect and a lack of viable alternatives.

Creating Entry Barriers to Rival Firms

The CCI further claimed that by exchanging WhatsApp user data amongst Meta businesses for objectives other than delivering WhatsApp services, Meta's competitors were prevented from entering the market and were denied access to the display ad market. WhatsApp's 2021 privacy policy modification has drawn criticism worldwide for violating users' privacy and raising antitrust issues. In August 2024, a Brazilian judge banned WhatsApp from exchanging data with Facebook and Instagram within the nation. According to a Meta representative, they intend to challenge the CCI's ruling.

The company intends to appeal the CCI's ruling because it disagrees with it. As a reminder, the 2021 upgrade was available to users at the time and did not alter the privacy of their private communications. A spokesperson for the company also confirmed that the update did not result in the deletion of any accounts or the loss of WhatsApp functionality.

In March 2021, CCI launched an inquiry into WhatsApp's January 2021 upgrade. Because the policy change had been contested in both the Delhi High Court and the Supreme Court, Meta (formerly Facebook) and WhatsApp had petitioned the Delhi High Court to halt this probe.

WhatsApp's case was denied by a single-judge panel led by Justice Navin Chawla in April 2021. In August 2022, a division bench consisting of Justice Subramonium Prasad and then Chief Justice Satish Chandra Sharma dismissed the appeal that Meta (formerly Facebook) and WhatsApp had filed against the ruling.