The National Company Law Appellate Tribunal (NCLAT) has allowed WhatsApp to partially resume sharing metadata with Meta platforms, including Facebook and Instagram, for advertising purposes. This overturns a 5-year ban imposed by the Competition Commission of India (CCI) in November 2024. However, WhatsApp is mandated to pay 50% of a ₹213.14 crore penalty within two weeks.
Impact of the CCI Order
The CCI had penalized WhatsApp for leveraging its market dominance to enforce its 2021 privacy policy update, which mandated data sharing without user opt-out options. According to the CCI, this policy undermined user autonomy, created entry barriers for competitors, and abused WhatsApp’s dominant market position.
Opt-Out and Compliance Mandates
While the NCLAT stayed the data-sharing ban, it upheld CCI’s directives requiring WhatsApp to:
- Clarify what data is shared with Meta and why.
- Provide users with opt-out options for data sharing beyond WhatsApp services.
Key Arguments
- WhatsApp’s Defense: Argued the ban harms its business model and that data sharing is essential for user experience and business sustainability. Senior advocates Kapil Sibal and Mukul Rohatgi highlighted that the DPDP Act, once enacted, will address data-sharing regulations comprehensively.
- CCI’s Stance: Asserted that WhatsApp’s practices were anti-competitive and pointed out that similar opt-out options are available in the EU but not in India.
Next Steps
Both parties must complete pleadings within six weeks, and the matter is scheduled for further hearing on March 17. WhatsApp has expressed its commitment to compliance while supporting businesses on its platform.
Stay updated for further developments in this ongoing regulatory battle.
