Meta secures relief on data sharing ban, penalty stays

The National Company Law Appellate Tribunal (NCLAT) on Tuesday upheld a 213.14 crore penalty imposed on WhatsApp and its parent company Meta Platforms Inc for abusing their dominant market position through the messaging platform's 2021 privacy policy update, but set aside a five-year ban on data sharing for advertising purposes.

- Ayesha Arvind

‘A bench comprising NCLAT chairperson Justice Ashok Bhushan and technical member Arun Baroka at the tribunal's principal seat in New Delhi agreed with the Competition Commission of India’s (CCI) findings that WhatsApp’s 2021 privacy update forced users into data sharing across Meta’s platforms.

The tribunal found that WhatsApp’s “take-it-or-leave-it” policy deprived users of meaningful consent, eroded privacy as an essential aspect of service quality, and created barriers for rival platforms in the online advertising ecosystem, violating Sections 4(2)(a)(i) and 4(2)(c) of the Competition Act.

It found no flaw in the CCI's calculation or methodology, holding that the penalty was justified given the extensive data sharing between WhatsApp and Meta had resulted in “anti-competitive effects” and was “proportionate to the gravity of the abuse”.