WhatsApp Vs CCI: Watchdog Seeks Clarity From NCLAT On Order

SUMMARY

The watchdog has urged the tribunal to specify whether user consent, as per its order, is needed in cases where data is used for advertising or for non-advertising purposes

NCLAT earlier set aside a part of the CCI order, which banned WhatsApp from sharing data with Meta Platforms for advertising purposes for five years, but retained the fine

While slapping the penalty of INR 213 Cr on the messaging app in 2024, CCI had observed that the policy update forced users to accept new terms on a “take it or leave it” basis

The Competition Commission of India (CCI) has reportedly sought clarity from the National Company Law Appellate Tribunal (NCLAT) over its recent judgment in the WhatsApp privacy policy case.

As per news agency PTI, the competition watchdog has urged the tribunal to specify whether user consent, as per its order, is needed in cases where data is used for advertising or for non-advertising purposes.

This follows the NCLAT earlier this month granting partial relief to WhatsApp and setting aside a part of the CCI order, which banned the messaging platform from sharing data with Meta Platforms for advertising purposes for five years.

However, the tribunal retained The INR 213 Cr penalty imposed by the CCI on the social media platform. It also upheld that WhatsApp’s 2021 privacy policy update breached antitrust laws, constituted abuse of dominance by WhatsApp and created a situation of market denial.

However, the NCLAT, after CCI’s plea for clarification, has slated the matter for next listing on November 25.

Meanwhile, the watchdog’s counsel Samar Bansal told PTI that CCI wants a clarification as to whether user consent is required if their data is used for advertising purposes or for non-advertising purposes.

“Now, in our understanding, what the NCLAT has basically said, in a nutshell, is that user consent is paramount and that regardless of whether the data is being used for advertising purposes or for any other non-advertising purposes, please take user consent. That is what the NCLAT holds in different parts of the order,” he reportedly said.

While noting that the concluding part of the judgement implied that WhatsApp will have to seek user consent for sharing user data for non-advertising purposes, Bansal, however, noted that there was “nothing being spoken of at all” about the treatment of data for advertising purposes.

“So, we have simply moved an application that the court must clarify what it meant, and actually, what its order already says is that user consent must be taken regardless of whether WhatsApp is sharing data, user data with other Facebook companies for advertising purposes or for non-advertising purposes. That is the one simple clarification we have asked,” he reportedly added.

At the heart of the matter is WhatsApp’s contentious 2021 privacy policy update. While slapping the penalty of INR 213 Cr on the Meta-owned platform in November 2024, CCI had observed that the policy update forced users to accept new terms on a “take it or leave it” basis.

Terming this an abuse of its dominant position that potentially damaged market competition, the watchdog directed WhatsApp to undertake sweeping changes such as limits on mandating data-sharing for users to access WhatsApp services in India.

Following that, Meta and WhatsApp challenged the CCI’s order last year. In January, the NCLAT granted the company an interim relief, temporarily staying the five-year data-sharing ban for advertising purposes.