Fresh Plea Against WhatsApp In NCLAT Over Alleged Abuse Of Its Dominant Position

A petition has been filed against WhatsApp in the National Company Law Appellate Tribunal (NCLAT) over an allegation of the Facebook-owned palatform abused its dominant positions in India to expand in the digital payments market. 

In August 2020, the antitrust watchdog Competition Commission of India (CCI) had scrapped a case on the same issue. 

Lawyer Harshita Chawla who filed a petition against Whatsapp in March is appealing against CCI’s dismissal with a fresh hearing in front of the Appellate Court on December 21. After hearing the arguments of both parties, NCLAT will decide whether the case requires a fresh admission and trial.

Earlier in March 2020, Chawla had moved the CCI alleging that WhatsApp was bundling its digital payments facility WhatsApp Payments within its messaging app, which has close to 400 Mn users in India. The petitioner claimed that WhatsApp’s move would give the company an undue edge over its competitors — PhonePe, Google Pay and Paytm.  

However, CCI noted that WhatsApp has not even launched its services in India, and is currently running on a beta version, serving less than 1% of the total WhatsApp userbase in India.

WhatsApp has been embroiled in a slew of lawsuits in the country over the past one year due to which it hasn’t been able to launch its payments feature beyond the beta mode.

“The tangible connection between messaging and payments might be difficult to prove for the petitioner, since CCI has already ruled ‘against’ WhatsApp leveraging its dominant position in the messaging market. Additionally, while the intent is in the right place, it might be premature for a case to be taken up in anticipation, basis a personal judgment that WhatsApp may abuse its dominant position, since no clear examples are presently currently in the market,” a senior lawyer aware of the matter told Mint.

Earlier this month, the National Payments Corporation of India (NPCI) gave approval for WhatsApp to ‘Go Live’ on UPI in the muti-bank model.

The payments authority said in a statement that the Facebook-owned messaging app can expand its UPI user base in a graded manner starting with a maximum registered user base of 20 Mn in UPI.

NPCI will also cap the total volume of UPI transactions at 30% for any third-party app provider (TPAP). This will be with effect from January 1, 2021.

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