CCI Order on WhatsApp's Use of User Data: Its Broad Thrust Is Fine

The NCLAT stayed a weak part of it but the case shows how privacy and antitrust issues are linked

- VIVEK AGARWAL is head of competition law practice at DMD Advocates.

On 23 January, the National Company Law Appellate Tribunal (NCLAT) partially stayed an order of the Competition Commission of India (CCI) imposing a penalty of ₹213.14 crore on WhatsApp and its parent company Meta for coercing its users to accept the WhatsApp Privacy Policy of 2021. Compared to its earlier policy of 2016, the 2021 policy expanded the scope of the user data that was being collected and shared with other Meta group companies such as Facebook and Instagram. The CCI noted that personal data of WhatsApp's users was being commercialized by Meta for purposes unrelated to the primary function of WhatsApp.

Unlike its 2016 policy, WhatsApp's 2021 update did not give its users an option to deny such commercialization of their personal data. The CCI held that the 'take-it-or-leave-it' nature of this policy was unfair and violated India's competition law, as it had compelled users to accept expanded data collection terms without any 'opt-out'. The terms of the two policies were also found to be "vague, broad, and open-ended," allowing WhatsApp flexibility to expand the scope of data collection at any time. The CCI investigation also found that by acquiring user data from WhatsApp and combining it with data from Facebook and Instagram, Meta strengthened its position in the online display advertising market. This integration made Meta a data giant, as it could monetize a vast trove of data across multiple platforms in ways that its competitors could not replicate.