New Delhi:
The National Company Law Appellate Tribunal (NCLAT) on Thursday stayed a five-year ban imposed by competition watchdog CCI on data-sharing practices between WhatsApp and its parent Meta for advertising purposes, offering a breather to the tech giant.
Meta had challenged the Competition Commission of India’s (CCI) directive issued in November 2024 that imposed a ban on data sharing between WhatsApp and other Meta entities for advertising purposes, warning it may have to roll back some features.
It had also slapped a Rs 213 crore penalty on Meta for abuse of its “dominant position.” The NCLAT also stayed the Rs 213.14-crore penalty, subject to deposit of 50 per cent of the penalty amount (after taking into consideration 25 per cent already deposited), within two weeks.
The tribunal observed that ban of five years that was imposed may lead to the collapse of business model which has been followed by messaging platform WhatsApp. It further noted that WhatsApp is providing its services to its users free of cost.
“We have also noticed that the Supreme Court has not granted interim order staying 2021 privacy policy and Digital Personal Data Protection Act 2023 has also been passed and is likely to be enforced which may cover all issues pertaining to data protection and data sharing. We are of the prima facie view that the ban of five years imposed…need to be stayed,” it said while listing the next hearing on March 17.
The CCI had concluded that WhatsApp’s 2021 privacy policy update unfairly compels users to agree to wide collection of data and its sharing within Meta group.
Meta welcomed the “NCLAT’s decision to grant a partial stay on the Competition Commission of India’s (CCI) order” and said it will evaluate next steps.
“While we will evaluate next steps, our focus remains on finding a path forward that supports millions of businesses that depend on our platform for growth and innovation as well as providing high-quality experiences that people expect from WhatsApp,” a Meta spokesperson said.
In November, the CCI imposed a penalty of Rs 213.14 crore on social media major Meta for unfair business ways with respect to the WhatsApp privacy policy update done in 2021.
Meta Platforms and WhatsApp had challenged this order before the NCLAT, which is an appellate authority over the orders passed by the CCI.
In its 156-page order, the CCI had on November 18, 2024, directed Meta to cease and desist from anti-competitive practices.
According to that CCI order, Meta and WhatsApp have also been asked to implement certain behavioural remedies within a defined timeline to address the anti-competition issues.
The regulator called for implementing various remedial measures, including barring WhatsApp from sharing data collected on its platform with other Meta companies or Meta company products for advertising purposes for five years.
Among other directions, CCI had said that sharing of user data collected on WhatsApp with other Meta companies or Meta company products for purposes other than for providing WhatsApp services shall not be made a condition for users to access WhatsApp services in India.
Murugavel Janakiraman, CEO & Founder, Matrimony.com said that the decision of the National Company Law Appellate Tribunal (NCLAT) on Meta’s appeal against the CCI ban on WhatsApp’s data sharing policies underscores the limitations of the existing ex-post nature of the competition law and highlights the need for ex-ante regulations.
“Ex-ante rules restricting ‘data usage’ as proposed in the draft Digital Competition Bill can go a long way in preventing large digital platforms/gatekeepers from abusing their dominant position sometimes even to the disadvantage of the end-users,” Janakiraman said.
As such, the ex-ante provision aims to ensure that behaviours of large digital enterprises are proactively monitored and that the CCI intervenes before instances of anti-competitive conduct transpire. In an ex-post framework, intervention happens after the occurrence of anti-competitive conduct.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
