NCLAT Acknowledges WhatsApp and Meta's Argument Against CCI's Penalty

Nitin Konde, Varun Bhardwaj

Jan 17, 2025 — 3 min read

NCLAT Considers WhatsApp and Meta's Plea Against CCI Penalty

The appeals submitted by Meta Platforms and WhatsApp against an order issued by the Competition Commission of India (CCI), a fair trade regulator, that imposed a penalty of INR 213.14 crore for abusing market dominance were admitted by the appellate panel NCLAT on 16 January. A two-member bench of the National Company Law Appellate Tribunal (NCLAT) stated that the matter needs to be taken into account after hearing Meta and CCI's initial statements. "We conclude that consideration should be given to the submission made by the parties. The NCLAT bench, which included Justice Ashok Bhushan as its chair, declared that it accepted both appeals. However, NCLAT stated that it will make a decision next week regarding the temporary respite to maintain the CCI order. The attorneys representing WhatsApp and Meta Platform asked the appellate tribunal to halt the CCI order during the hearings. The attorney representing the Competition Commission of India, however, disagreed.

What was the issue?

The CCI fined social media giant Meta INR 213.14 crore on November 18 for using unfair business practices in connection with the 2021 WhatsApp privacy policy modification. The NCLAT, which has appellate jurisdiction over CCI orders, has received challenges to this order from Meta Platforms and WhatsApp. Speaking on behalf of Meta and WhatsApp, Senior Advocates Kapil Sibal and Mukul Rohatgi argued that the CCI had overreached itself in making a decision about WhatsApp's privacy policy while the case was still pending before a Supreme Court Constitution Bench.

The entity's privacy policy now includes CCI. It is in front of five Supreme Court judges. According to him, it lacks the authority to handle it. Furthermore, there isn't a complaint in this instance, and CCI reached an "erroneous conclusion" regarding dominance without considering the "effect analysis" of that. According to Sibal, "Without an effect analysis, you cannot come to the conclusion," and the CCI hasn't even looked at the specific data being shared. Additionally, he said that CCI had prohibited WhatsApp from using data gathered on its platform for advertising reasons with other Meta firms or Meta company goods for five years and that "they are trying to destroy the business model."

Monetisation is the Key to Any Business

Sibal went on to say that no software can thrive without generating revenue, noting that comparable platforms like Signal and Telegram have their own revenue schemes. Additionally, search applications make money in different ways. Additionally, he requested an emergency stay on the CCI order, which was due on February 19. According to Sibal, NCALT can take up the issue and make a decision after the Supreme Court rules on the privacy policy and the legislative regulations are established. "Moreover, the balance of convenience is in our favour, as we have been operating this for years," he continued.

WhatsApp spokesperson Mukul Rohatgi stated that everyone can use the app for free and that no one is being charged for sending "Good Morning to Good Night" messages that include videos. How is it possible for anyone to live on a free model? This sharing isn't ominous. This is merely a business plan. These days, Facebook and WhatsApp are owned by the same company. He claimed that this type of sharing is harmless and not destructive. On behalf of the CCI, attorney Samar Bansal, however, disagreed with these claims, arguing that the CCI's investigation and the Supreme Court case did not overlap. In response to a bench question, he stated that competition law examines commercial data, whereas data privacy law exclusively examines personal data.