WhatsApp to continue to share metadata for ads to Meta: NCLAT

...Digital Personal Data Protection Act is likely to be imposed which may cover all issues related to data protection and data sharing ASHOK BHUSHAN, NCLAT Chairperson

- Aditi Agrawal

NEW DELHI: The National Company Law Appellate Tribunal (NCLAT) on Thursday granted partial relief to WhatsApp from the Competition Commission of India's November 2024 against its 2021 privacy policy update.

The CCI order had forbidden WhatsApp from sharing user data with Meta (Facebook, Instagram, etc.) for advertising purposes and imposed a ₹213.14 crore penalty on WhatsApp for violating the Competition Act by using its market dominance to "coerce" users into accepting the update.

NCLAT chairperson Ashok Bhushan stayed the 5-year moratorium on data sharing but said that WhatsApp will have to pay 50% of the penalty within two weeks. Other parts of the CCI order—such as providing an opt-out option—have not been stayed.

"We are of the prima facie view that ban of five years imposed in paragraph 247.1 needs to be stayed. We are however of the view that the directions issued by the CCI under paras 247.2 and 247.3 need not to be stayed and they need to be complied with," he said.

Under paragraphs 247.2 and 247.3, for data shared with Meta companies and products for purposes other than advertising, the CCI directed WhatsApp to specify in its policy what kind of data is shared and why.

When WhatsApp user data is shared for any purpose other than providing WhatsApp services, the users must be given the choice to opt out of such data sharing, and modify their choice in-app. This option must be made available to all users, including those who accepted the 2021 update. The CCI, in its November 18 order, had directed these changes to be made within three months of the order being passed.

While pronouncing the order, Bhushan noted that the 5-year moratorium could "lead to the collapse of the business model" of WhatsApp, and that WhatsApp provided free services to users.