On 18-11-2024, the Competition Commission of India (‘CCI’) passed an order to impose a penalty of Rs. 213.14 crores on Meta regarding how WhatsApp’s 2021 Privacy Policy was implemented and how user data was collected, which was shared with other Meta companies. CCI issued cease-and-desist directions while directing Meta and WhatsApp to implement certain behavioural remedies within a defined timeline.
Key Points:
-
CCI marked out two relevant markets, i.e., the market for OTT messaging apps through smartphones in India and the market for online display advertising in India. Meta Group was found to hold a leading and dominant position in both markets.
-
With the latest policy update in 2021, WhatsApp made data sharing with Meta mandatory for all users to continue using the platform, removing the earlier option to opt out.
-
CCI concluded that the 2021 policy update constituted an imposition of unfair condition, as it forced the users to comply and undermined their autonomy. Thus, CCI found that Meta had contravened Section 4(2)(a)(i) of the Competition Act, 2002 (‘Act’).
-
CCI also concluded that sharing WhatsApp users’ data between Meta companies for purposes other than providing WhatsApp services creates an entry barrier for rivals of Meta and results in denial of market access in the display advertisement market, contravening provisions of Section 4(2)(c) of the Act.
-
Further, CCI observed that Meta had used its dominant position in the OTT messaging apps through smartphones to protect its position in the online display advertising market, contravening Section 4(2)(e) of the Act.
-
To address the anti-competitive harm, WhatsApp was directed not to share user data with other Meta companies or Meta company products for advertising purposes for 5 years from the date of receipt of the said order.
-
The following directions were passed regarding the sharing of WhatsApp user data for purposes other than advertising:
-
WhatsApp’s policy must include a detailed explanation of the user data shared with Meta companies or Meta company products. This explanation must specify the purpose of data sharing.
-
Sharing of user data collected on WhatsApp with other Meta companies or Meta company products for purposes other than rendering WhatsApp services must not be made a condition for users to access WhatsApp in India.
-
Regarding sharing user data for purposes other than providing WhatsApp services, all users in India will be provided with the choice to manage such data sharing through an opt-out option by in-app notifications.
-
Further, all users in India will have the option to review and modify their choice regarding such data sharing through a prominent tab in WhatsApp settings.
-
After expiry of 5 years, the directions in para 6.2 (except para 6.2.1) of this order, will apply mutatis mutandis regarding data sharing for advertising purposes.
-
- CCI also mentioned that all future policies must comply with the requirements as mentioned in this order.
