Case BriefsInternational Courts

European Court of Justice (ECJ): In a long-fought battle against Facebook the Belgian Data Protection Authority had secured a major win.  The decision of the Grand Chamber composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice‑President, A. Arabadjiev, A. Prechal, M. Vilaras, M. Ilešič and N. Wahl, Presidents of Chambers, E. Juhász, D. Šváby, S. Rodin, F. Biltgen, K. Jürimäe, C. Lycourgos, P.G. Xuereb and L.S. Rossi (Rapporteur), JJ., had made Facebook and other Tech companies vulnerable to potential sanctions in the European Union after the Court authorized the supervisory authority of a Member State to lift the “one-stop-shop” veil.

In Issue

  • Regulation (EU) 2016/679 of the European Parliament and the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data.
  • Repealing Directive 95/46/EC (General Data Protection Regulation) read together with Articles 7, 8 and 47 of the Charter of Fundamental Rights of the EU.

Privacy Infringement by Facebook

The President of the Privacy Commission, Belgium had brought legal proceedings seeking an injunction against Facebook Ireland, Facebook Inc. and Facebook Belgium before the Court of First Instance. The object of those injunction proceedings was to bring to an end to the ‘serious and large scale infringement, by Facebook, of the legislation relating to the protection of privacy consisting in the collection by that online social network of information on the internet browsing behaviour both of Facebook account holders and of non-users of Facebook services by means of various technologies, such as cookies, social plug-ins (Like or Share buttons) or pixels. The Commission contended that those features had permitted Facebook to obtain certain data of an internet user who visits a website page containing them, such as the address of that page, the ‘IP address’of the visitor etc.

Directions of the Court of First Instance

On the substance, that Court held that Facebook was not adequately informing Belgian internet users of the collection of the information concerned and of the use of that information. Further, the consent given by the internet users to the collection and processing of that data was held to be invalid. Consequently, that Court ordered Facebook Ireland, Facebook Inc. and Facebook Belgium

  1. to desist from placing, without consent, cookies that remain active for two years on the devices when browsing a web page in the Facebook.com domain or visiting the website of a third party, and from placing cookies and collecting data by means of social plug-ins, pixels or similar technological means on third party websites, in a manner that was excessive in the light of the objectives pursued by the Facebook social network,
  2. to desist from providing information that might reasonably mislead the data subjects as to the real extent of the mechanisms put in place by Facebook for the use of cookies, and
  3. to destroy all the personal data obtained by means of cookies and social plug-ins.

Stand Taken by Facebook

Facebook approached the Court of Appeal Brussels, Belgium contending that the action brought for injunction was inadmissible, as the DPA had no competence and right to bring such an action given the existence of the ‘one-stop shop’ mechanism provided under the provisions of Regulation 2016/679. On the basis of those provisions, it was only the Data Protection Commissioner (Ireland) who could bring injunction proceedings against Facebook, the latter being the sole controller (one-stop shop) of the personal data of the users of the social network concerned within the European Union.

The Court of Appeal referred the question raised by Facebook regarding one-stop shop to the European Court of Justice for its opinion on the matter.

Analysis by the Court

To ascertain whether under Article 55(1), Articles 56 to 58 and Articles 60 to 66 of Regulation 2016/679, read together with Articles 7, 8 and 47 of the Charter, a supervisory authority of a Member State other than the ‘lead supervisory authority’ has the power to bring any alleged infringement of that regulation to the attention of a Court of that Member State and to initiate or engage in legal proceedings with respect to cross-border data processing; the Bench noticed,

“In relation to such data processing the legal basis of Regulation 2016/679 is Article 16 TFEU, which enshrines the right of everyone to the protection of personal data concerning them and authorises the European Parliament and the Council of the European Union to lay down the rules relating to the protection of individuals with regard to the processing of that data by European Union institutions and by the Member States, when carrying out activities which fall within the scope of EU law, and the rules relating to the free movement of such data. Second, recital 1 of that regulation confirms that ‘the protection of natural persons in relation to the processing of personal data is a fundamental right’ and states that Article 8(1) of the Charter and Article 16(1) TFEU lay down the right of everyone to the protection of personal data concerning them.”

Exceptions to “One-stop Shop” Mechanism

One-stop Shop: The ‘one-stop shop’ mechanism, is based on an allocation of competences between one ‘lead supervisory authority’ (Data Protection Commissioner (Ireland)), wherein only the supervisory authority of the main establishment is to be competent to act as lead supervisory authority and handle can handle legal cases involving cross-border data complaints.

The top Court, though upheld the ‘one-stop shop’ shop mechanism, at the same time proceeded to carve out certain exceptions for the same:

Exception 1: As per Article 56(2) of Regulation 2016/679, a supervisory authority which is not the lead supervisory authority is to be competent to handle a complaint lodged with it concerning a cross-border processing of personal data or a possible infringement of that regulation, if the subject matter relates only to an establishment in its own Member State or substantially affects data subjects only in that Member State.

Exception 2: Article 66 of Regulation 2016/679 provides for an urgency procedure. That urgency procedure makes it possible, in exceptional circumstances, where the supervisory authority concerned considers that there is an urgent need to act in order to protect the rights and freedoms of data subjects, immediately to adopt provisional measures intended to produce legal effects on its own territory with a specified period of validity which is not to exceed three months, while Article 66(2) of Regulation 2016/679 further provides that, where a supervisory authority has taken a measure under Article 66(1) and considers that final measures must urgently be adopted, it may request an urgent opinion or an urgent binding decision from the European Data Protection Board, giving reasons for requesting such an opinion or decision.

Hence, a supervisory authority of a Member State has the power to bring any alleged infringement to the attention of a court of that Member State and to initiate or engage in legal proceedings in relation to cross‑border data processing even though it is not the ‘lead supervisory authority’  provided that that power is exercised in one of the situations where Regulation 2016/679 confers on that supervisory authority a competence to adopt a decision finding that such processing is in breach of the rules contained in that regulation.

The controller against whom such proceedings are brought need not to have a main establishment in the member State taking action

In the event of cross-border data processing, it is not a prerequisite for the exercise of the power of a supervisory authority of a Member State, other than the lead supervisory authority, to initiate or engage in legal proceedings that the controller against whom such proceedings are brought has a main establishment or another establishment on the territory of that Member State.

Action can be brought under EU Directive against processing of personal data happened prior to when the regulation became applicable

Where a supervisory authority of a Member State other than the ‘lead supervisory authority’, has brought a legal action on the instance of cross-border processing of personal data before the date when that regulation became applicable, that action may be continued on the basis of the provisions of Directive 95/46/EC of the European Parliament and of the Council of 24-10-1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, which remains applicable in relation to infringements of the rules laid down in that directive committed up to the date when that directive was repealed. Article 58(5) of Regulation 2016/679 must be interpreted as meaning that that provision has direct effect, with the result that a national supervisory authority may rely on that provision in order to bring or continue a legal action against private parties, even where that provision has not been specifically implemented in the legislation of the Member State concerned.[Facebook Ireland Ltd, Facebook Inc. & Facebook Belgium v.  Belgian Data Protection Authority, C‑645/19, decided on 15-06-2021]


Kamini Sharma, Editorial Assistant has reported this brief.

Case BriefsForeign Courts

Supreme Court of The United States (SCOTUS): On April 1st, the 9 Judge Bench of the Court while looking into the allegations levelled against Facebook for violating the Telephone Consumers Protection Act, 1991 (hereinafter TCPA), held that the Court cannot rewrite the TCPA to update it for modern technology. Congress’ cho­sen definition of an autodialer requires that the equipment in question must use a random or sequential number generator. That definition excludes equipment like Facebook’s login notification system, which does not use such technology. The Court held that in order to qualify as an “automatic telephone dialing system” under the TCPA, a device must have the capacity either to store a telephone number using a random or sequential number generator, or to produce a telephone number using a random or sequential number generator.

The facts as they stood; popular social media platform Facebook, as a security feature, allows users to elect to receive text messages when someone attempts to log in to the user’s account from a new device or browser. Noah Duguid was sent such texts by Facebook which alerted him to a login his Facebook account linked to his mobile number. The twist in the tale came up when Duguid stated that he never created that particular account or for that matter any other account on Facebook.

Duguid tried unsuccessfully to stop the unwanted messages, and eventually brought a putative class action against Facebook. He alleged that Facebook violated the TCPA by maintaining a database that stored phone numbers and programming its equipment to send automated text messages. Facebook contended that the TCPA does not apply because the technology it used to text Duguid did not use a “random or sequential number generator”. The Ninth Circuit’s however did not favour Facebook when it held that S. 227 (a) (1) of the TCPA applies to a notifica­tion system like Facebook’s that has the capacity to dial automatically stored numbers.

The Telephone Consumer Protection Act of 1991 (TCPA) forbids abu­sive telemarketing practices by, among other things, restricting cer­tain communications made with an “automatic telephone dialing sys­tem.” The TCPA defines such “autodialers” as equipment with the capacity both “to store or produce telephone numbers to be called, us­ing a random or sequential number generator,” and to dial those num­bers.

Perusing the facts and the relevant statutes, the Court observed that the issue is that whether the clause “using a random or se­quential number generator” in S. 227(a)(1)(A) modifies both of the two verbs that precede it (“store” and “produce”), or only the closest one (“produce”).  The former interpretation was adopted by Facebook in the matter. The Court noted that the most natural reading of the text and other aspects of S. 227(a)(1)(A) confirms Facebook’s view-

  1. In an ordinary case, the “series-qualifier canon” instructs that a modifier at the end of a series of nouns or verbs applies to the entire series.
  2. The modify­ing phrase immediately follows a concise, integrated clause (“store or produce telephone numbers to be called”), which uses the word “or” to connect two verbs that share a common direct object (“telephone num­bers to be called”).
  • The comma in S. 227(a)(1)(A) separating the modifying phrase from the antecedents suggests that the qualifier applies to all of the antecedents, instead of just the nearest one.

The Court further observed that the text of TCPA confirms that the statute’s definition of “autodialer” excludes equipment that does not use a random or sequential number generator. “Congress found autodialer technology harmful be­cause autodialers can dial emergency lines randomly or tie up all of the sequentially numbered phone lines at a single entity. Facebook’s interpretation of S. 227(a)(1)(A) better matches the scope of the TCPA to these specific concerns”. The Court noted that even though Duguid broadly construed the TCPA vis-à-vis privacy, however, the Congressional intent was clear about intrusive telemarketing practices, which is why the Congress ultimately chose a precise autodialer definition. [Facebook Inc. v. Duguid,  2021 SCC OnLine US SC 2, decided on 01-04-2021]


Sucheta Sarkar, Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): The coram comprising of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) while addressing a very interesting matter with respect to WhatsApp’s updated policy, expressed that:

“…in a data driven ecosystem, the competition law needs to examine whether the excessive data collection and the extent to which such collected data is subsequently put to use or otherwise shared, have anti-competitive implications, which require anti-trust scrutiny.”

As per several media reports, WhatsApp updated its privacy policy and terms of service for WhatsApp users.

It was reported that the new policy made it mandatory for the users to accept the terms and conditions in order to retain their WhatsApp account information and provides as to how it will share personalized user information with Facebook and its subsidiaries.

In the present matter, both Facebook and WhatsApp will together be referred to as ‘Opposite Parties’.

Commission on noting the impact of policy and terms for WhatsApp users decided to take suo motu cognizance of the matter.

WhatsApp submitted that its current Terms and Service and Privacy Policy, as well as the proposed update in the same fall within the purview of the information and technology law framework and these issues, are currently sub judice before various courts and other fora in India.

Further, it was added that the examination of the 2021 Update by Courts and the Government of India is not merely limited to data protection/ privacy laws but extends to assessing more broadly whether the 2021 Update is in conformity with principles of fairness, public policy and national security considerations.

WhatsApp relied on the Supreme Court decision in Competition Commission of India v. Bharti Airtel Limited, (2019) 2 SCC 521, and stated that the said decision emphasized the need to maintain comity between decisions of different authorities on the same issues and held that the Commission should only exercise jurisdiction after the proceedings before the sectoral regulator had concluded and attained finality.

Bench noted that WhatsApp failed to point out any proceedings on the subject matter which a sectoral regulator is seized of.

“…Commission is examining the policy update from the perspective of competition lens in ascertaining as to whether such policy updates have any competition concerns which are in violation of the provisions of Section 4 of the Act.”

 Further, the Commission added that, it is obligated to ‘prevent’ practices having adverse effect on competition.

Whether the Ops have violated provisions of Section 4 of the Act?

 On what points has the Commission sought clarification?

  • The primary aim of the 2021 Update is twofold: (i) to provide users with further transparency about how WhatsApp collects, uses and shares data; and (ii) to inform users about how optional business messaging features work when certain business messaging features become available to them.
  • 2016 Update allowed existing users the option to opt-out of sharing their WhatsApp account information with Facebook Companies for ads and product experiences purposes. WhatsApp is continuing to honour the 2016 opt-out for anyone who had chosen it, and the most recent updates do not change that. If anyone who has previously opted out agrees to the 2021 Update, WhatsApp will acknowledge their agreement to the 2021 Update and also continue to honour the 2016 opt-out.
  • Privacy of personal messaging is integral to the growth and vision of WhatsApp. This commitment to keeping WhatsApp a safe and protected place where people can connect privately has not changed. WhatsApp cannot see users’ personal conversations with friends and family because they are protected by end-to-end encryption.
  • 2021 Update does not expand WhatsApp’s ability to share data with Facebook and does not impact the privacy of personal messages of WhatsApp users with their friends and family.
  • The 2021 Update provides more specifics on how WhatsApp works with businesses that use Facebook or third parties to manage their communications with users on WhatsApp. Even for users who choose to interact with a business on WhatsApp, the implications of such data sharing are minimal.

WhatsApp submitted that the 2021 Update raised no concerns from a competition perspective and the said Update aimed to provide greater transparency, hence no investigation shall be initiated.

Commission took note of the recent developments wherein the competing apps, i.e. Signal and Telecom witnessed a surge in downloads after the policy announcement by WhatsApp. However, apparently, it did not result in any significant loss of users for WhatsApp.

Comparison with Previous Policy| No opt-out option?

As per the previous policy, existing users were provided with an option to choose not to have their WhatsApp account information shared with Facebook. However, it was evident from the latest policy statement on the WhatsApp website and the media reports that the said choice as was available under the previous policy is not available now.

“…consent to sharing and integration of user data with other Facebook Companies for a range of purposes including marketing and advertising, has been made a precondition for availing WhatsApp service.”

Moving ahead, Bench noted that the data collected by WhatsApp would be shared with Facebook Companies for various usages envisaged in the policy. The Commission also took note of the submission of WhatsApp that it would continue to honour the ‘opt-out’ option exercised by users during the 2016 Update; however, the 2021 Update do not create any carveout for such users who opted for not sharing their information with Facebook.

On considering the overarching terms and conditions of the new policy, the Commission prima facie opined that the ‘take-it-or-leave-it nature of privacy policy and terms of service of WhatsApp and the information sharing stipulations mentioned therein merit a detailed investigation in view of the market position and market power enjoyed by WhatsApp.

The conduct of WhatsApp/ Facebook under consideration merits detailed scrutiny.

Bench opined that the users are entitled to be informed about the extent, scope and precise purpose of sharing of such data by WhatsApp with other Facebook Companies.

“… opacity, vagueness, open-endedness and incomplete disclosures hide the actual data cost that a user incurs for availing WhatsApp services. “

Commission also observed that it is also not clear from the policy whether the historical data of users would also be shared with Facebook Companies and whether data would be shared in respect of those WhatsApp users also who are not present on other apps of Facebook i.e., Facebook, Instagram, etc.

There appeared to be no justifiable reason as to why users should not have any control or say over such cross-product processing of their data by way of voluntary consent, and not as a precondition for availing WhatsApp’s services.

No Voluntary Agreement

Users are required to accept the unilaterally dictated ‘take-it-or-leave-it’ terms by a dominant messaging platform in their entirety, including the data sharing provisions therein, if they wish to avail their service. Such “consent” cannot signify voluntary agreement to all the specific processing or use of personalised data, as provided in the present policy.

Unfair

On a careful and thoughtful consideration of the matter, the conduct of WhatsApp in sharing of users’ personalised data with other Facebook Companies, in a manner that is neither fully transparent nor based on voluntary and specific user consent, appears prima facie unfair to users.

Data Sharing with Facebook

The impugned conduct of data-sharing by WhatsApp with Facebook apparently amounts to degradation of non-price parameters of competition

The impugned data-sharing provision may have exclusionary effects also in the display advertising market which has the potential to undermine the competitive process and creates further barriers to market entry besides leveraging, in violation of the provisions of Section 4(2)(c) and (e) of the Act.

While stating that a thorough and detailed investigation is required in the matter, and DG to complete the same within a period of 60 days, held that WhatsApp has prima facie contravened the provisions of Section 4 of the Act through its exploitative and exclusionary conduct, as detailed in this order, in the garb of policy update.[Updated Terms of Service and Privacy Policy for WhatsApp Users, In Re., 2021 SCC OnLine CCI 19, decided on 24-03-2021]

Case BriefsHigh Courts

Orissa High Court: S.K. Panigrahi, J., while addressing the instant case highlighted the significance of “Right to be forgotten” and observed that,

“…many victims find the criminal justice system complex, confusing and intimidating.”

The instant application was preferred under Section 439 of the Criminal Procedure Code, 1973. Offences pertaining to which the application was preferred were punishable under Sections 376, 292, 465, 469, 509 of Penal Code, 1860 read with Sections 66, 66(C), 67, 67(A) of the I.T. Act, 2000.

Factual Matrix

In the FIR set forth on 03-05-2020, It was alleged that the informant was in love with the petitioner for a period of about one year.

Both the petitioner as well as the informant were village mates and classmates. One day, petitioner went to the house of the informant and taking advantage of her being alone, she was raped and the gruesome incident was recorded on his mobile phone.

Petitioner threatened to kill the informant if she disclosed the incident to her parents and also the photos and videos would be made viral.

Further, it was alleged that the petitioner had maintained physical intimacy with the informant.

Objectionable Photos on Facebook

Upon the informant narrating the incident to her parents, the petitioner opened a fake Facebook ID in the name of the informant and uploaded all the objectionable photos using the said ID in order to further traumatize her.

Initially, the police failed to take any step and portrayed unsoundness of the police system. After much difficulty, finally, the informant could get the present FIR lodged.

Analysis, Law and Decision

Prima facie it appeared to the Court that the petitioner uploaded objectionable photos/videos on a social media platform and on police intervention the same was deleted.

“…the information in the public domain is like toothpaste, once it is out of the tube one can’t get it back in and once the information is in the public domain it will never go away.”

Right of the Victim

Court observed that, the Criminal Justice system prescribes a strong penal action against the accused of the heinous crime but there is no mechanism available with respect to the right of the victim to get the objectionable photographs deleted from the server of the Facebook.

Bench adding to the issue of the right of the victim also stated that there is an unprecedented escalation of insensitive behavior on the social media platforms and the victim like the present one could not get those photos deleted permanently from the server of such social media platforms like Facebook.

Right to Privacy | Right to get Deleted

The statute prescribes penal action for the accused of such crimes, the rights of the victim, especially, her right to privacy which is intricately linked to her right to get deleted in so far as those objectionable photos have been left unresolved.

Right to be Forgotten

Bench notes that presently, there is no statute in India which provides for the right to be forgotten/getting the photos erased from the server of the social media platforms permanently. Whereas, the legal possibilities of being forgotten online or offline cries for a widespread debate.

Adding to the above, it was also stated that every single time, it cannot be expected that the victim shall approach the court to get the inaccurate data or information erased which is within the control of data controllers such as Facebook or Twitter or any other social media platforms.

In the case of Google Spain SL v. Agencia Espanola de Protection de Datos, (AEPD), C-131/12 [2014] QB 1022, the European Court of Justice ruled that the European citizens have a right to request that commercial search engines, such as Google, that gather personal information for profit should remove links to private information when asked, provided the information is no longer relevant. The Court, in that case, ruled that the fundamental right to privacy is greater than the economic interest of the commercial firm and, in some circumstances; the same would even override the public interest in access to information.

Relying on the decision of the Supreme Court on K.S. Puttaswamy (Privacy-9J), (2017) 10 SCC 1, Court stated that at present,

“…there is no statue which recognizes right to be forgotten but it is in sync with the right to privacy.”

However, the Ministry of Law and Justice, on recommendations of Justice B.N. Srikrishna Committee has included the Right to be forgotten which refers to the ability of an individual to limit, delink, delete, or correct the disclosure of the personal information on the internet that is misleading, embarrassing, or irrelevant etc. as a statutory right in Personal Data Protection Bill, 2019.

Supreme Court in the decision of X v. Hospital ‘Z’, (1998) 8 SCC 296, recognized an individual’s right to privacy as a facet Article 21 of the Constitution of India. It was also pertinently held that the right which would advance the public morality or public interest would alone be enforced through the process of the court, for the reason that moral considerations cannot be kept at bay and the Judges are not expected to sit as mute structures of clay in the halls known as the courtroom but have to be sensitive, “in the sense that they must keep their fingers firmly upon the pulse of the accepted morality of the day.” 

Delhi High Court in the decision of Zulfiqar Ahman Khan v. Quintillion Business Media (P) Ltd., 2019 (175) DRJ 660 also recognised the “right to be forgotten” and ‘Right to be left alone’ as an integral part of individual’s existence.

Karnataka High Court in {Name Redacted} v. Registrar General, WP (Civil) Nos. 36554-36555/2017 decided on 04-01-2018 recognized “Right to be forgotten” explicitly, though in a limited sense. Petitioner’s request to remove his daughter’s name from a judgment involving claims of marriage and forgery was upheld by the Court. It held that recognizing the right to be forgotten would parallel initiatives by ‘western countries’ which uphold this right when ‘sensitive’ cases concerning the ‘modesty’ or ‘reputation’ of people, especially women, were involved.

Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011

Bench observed that the above-stated was the first legal framework which recognized the need to protect the privacy of personal data, but failed to capture the issue of the “Right to be Forgotten”.

Capturing the images and videos with consent of the woman cannot justify the misuse of such content once the relation between the victim and accused gets strained as it happened in the present case.

Adding to its observations, Court stated that

If the right to be forgotten is not recognized in matters like the present one, any accused will surreptitiously outrage the modesty of the woman and misuse the same in the cyber space unhindered.

High Court also stated in reference to the Personal Data Protection Bill that, Section 27 of the draft Bill, 2018 contains the right to be forgotten. Under Section 27, a data principal (an individual) has the right to prevent continuing disclosure of personal data by a data fiduciary. Court points out that the said Bill carves out the “right to be forgotten”.

Bench prima facie stated that the petitioner has not only committed forcible sexual intercourse with the victim girl but has also deviously recorded the intimate sojourn and uploaded the same on a fake Facebook account.

In view of the heinousness of the crime, petitioner does not deserve any consideration for bail at the present stage.

“Indian Criminal Justice system is more of a sentence oriented system with little emphasis on the disgorgement of victim’s loss and suffering, although the impact of crime on the victim may vary significantly for person(s) and case(s)– for some the impact of crime is short and intense, for others the impact is long-lasting.”

Court in regard to the objectionable photos stated that, allowing such objectionable photos and videos to remain on a social media platform, without the consent of a woman, is a direct affront on a woman’s modesty and, more importantly, her right to privacy.

Bench in view of the above was not inclined to enlarge the petitioner on bail. [Subhranshu Rout v. State of Odisha, 2020 SCC OnLine Ori 878, decided on 23-11-2020]


Advocates who appeared in the matter:

For the Petitioner: Bibhuti Bhusan Behera and S. Bahadur, Advocates

For the Opposite Party: Manoj Kumar Mohanty, Additional Standing Counsel

Case BriefsHigh Courts

Punjab and Haryana High Court: Sudhir Mittal, J., while addressing a bail matter observed that, while criticising the government in a democracy is a right of the citizen, the same should be done in a decent manner and unparliamentary language should not be adopted.

In the instant matter, bail was sought for the case registered under Sections 115, 124-A, 153-A, 505(2), 295, 188, 269, 270, 271, 506 Penal Code, 1860, Section 3 of the Epidemic Diseases Act, 1897 and Section 54 of the Disaster Management Act, 2005.

SEDITION

Petitioner by going live On Facebook had made statements against the unity and integrity of the Nation. Hence an FIR was registered against him for the offences of sedition, hurting religious sentiments and causing communal disaffection.

Petitioner’s Counsel submitted that on an examination of utterances made by the petitioner it can be seen that the offences of sedition and inciting communal disaffection are not attracted.

Analysis and Decision

Bench on perusal of the transcript of the CD prepared from the live performance of the petitioner noted that the petitioner was unhappy with the lockdown that was imposed due to the pandemic and the way Government of India as well as the Punjab Government was handling the situation.

He definitely used intemperate and abusive language while criticising the Government, but the same does not amount to disaffection towards the Government established by law or to excite hatred against it.

The above also doesn’t amount to inciting religious disaffection or disruption of communal harmony.

In a democracy, every citizen has a right to voice his/her opinion freely and criticize the functioning of the Government. The same should be done in a decent manner and un-parliamentary language should not be adopted.

State needs to be more tolerant and circumspect while invoking laws pertaining to sedition and religious disaffection.

Petitioner has been in custody for 6 months and 14 days and it seemed that the trial could not be concluded at an early date and since no other criminal case was pending against the petitioner, Court granted him regular bail.[Jasbir v. State of Punjab, Crl. Misc. No. M-19376 of 2020, decided on 30-10-2020]


Jasraj Singh, Advocate for the petitioner

Sidakmeet Singh Sandhu, AAG, Punjab.

Case BriefsTribunals/Commissions/Regulatory Bodies

Competition Commission of India (CCI): The Coram of Ashok Kumar Gupta (Chairperson) and Sangeeta Verma and Bhagwant Singh Bishnoi (Members) while addressing the complaint in regard to unfair business by WhatsApp, dismissed the same on finding no competition concern.

Informant has filed the present information under Section 19(1)(a) of the Competition Act, against Whatsapp and Facebook alleging a contravention of provisions of Sections 4 of the Act and both Facebook and Whatsapp are collectively known as “OPs”.

Users of WhatsApp automatically get the payment app owned by WhatsApp i.e. ‘WhatsApp Pay’ installed on their smartphones. This, as per the Informant leads to the contravention of Section 4(2)(a)(i) of the Act as automatic installation of WhatsApp Pay on existing WhatsApp Messenger user’s device amounts to the imposition of an unfair condition on the users/consumers.

COERCION

A user who does not wish to install the Payments App but only the Messenger App does not have the option to do so.

Contravention: Section 4(2)(e)

Automatic installation also amounts to a contravention of Section 4(2)(e) of the Act as the dominance of WhatsApp in the Internet-based instant messaging App market favours and protects it in the UPI enabled Digital Payments Applications Market.

Informant further alleges that the acquisition of WhatsApp, Instagram and Oculus by Facebook causes an adverse effect on the competition as these companies to have huge data sets of users that they can use for their commercial advantage.

Decision and Analysis

Coram observes that the preamble to the Act unequivocally voices the ethos with which the Act was enacted, keeping in view the economic development of the country, for the establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto.

The mere fact that a case has been filed by an aggrieved party under the Competition Act, does not take away its character of being a case in rem involving a larger question of fair and competitive markets.

Further, it was observed that the Informant need to necessarily be an aggrieved party to file a case before the Commission.

Forum Shopping

Informant has indulged in forum shopping being closely associated with a petitioner who has approached the Supreme Court against WhatsApp and Facebook and this apparent non-disclosure reveals the mala fide intent and unclean hands with which the Informant has approached the Commission.

The Commission observes that WhatsApp and Facebook are third-party apps broadly providing internet-based consumer communications services. Consumer communications services can be sub-segmented based on different parameters.

Commission agrees with the Informant that the second relevant market for assessing the allegations of the Informant would be ‘market for UPI enabled Digital Payments Apps in India’.

At the outset, the Commission observes that Facebook and WhatsApp are group entities and though they may operate in separate relevant markets, their strengths can be attributed to each-others’ positioning in the respective markets in which they operate.

Commission added that in the absence of concrete data/information available in the Indian context other than the subjective information on the popularity of WhatsApp, the Commission is of the view that these trends and results can be used as a proxy, the said trends point towards Whatsapp’s dominance.

Barriers to Entry

The barriers to entry, may arise indirectly as a result of the networks effects enjoyed by the dominant player in the market, i.e. WhatsApp, in the present case. Since network effects lead to increased switching costs, new players may be disincentivized from entering the market.

Hence, Commission prima facie finds WhatsApp to be dominant in the first relevant market — market for OTT messaging apps through smartphones in India.

As regards Section 4(2)(a)(i), the Commission does not find much merit in the allegation of the Informant as mere existence of an App on the smartphone does not necessarily convert into transaction/usage.

Incorporating the payment option in the messaging app does not seem to influence a consumer’s choice when it comes to exercising their preference in terms of app usage, particularly since there seems to be a strong likelihood of a status quo bias operating in favour of the incumbents, at present.

With regard to the allegation under Section 4(2)(d) of the Act, the Commission observes that though the Informant has used the word ‘bundling’, the nature of such allegation is more akin to ‘tying’ as understood in the antitrust context generally.

While ‘tying’ refers to a practice whereby the seller of a product or service requires the buyers to also purchase another separate product or service, which essentially is the allegation of the Informant.

Installation of the WhatsApp messenger does not appear to explicitly mandate/coerce the user to use WhatsApp Pay exclusively or to influence the consumer choice implicitly in any other manner, at present.

UPI Market

UPI market is quite established with renowned players competing vigorously. Given the fact that WhatsApp ecosystem does not involve paid services as such for normal users, it seems unlikely that the consumer traffic will be diverted by WhatsApp using its strength in the messenger market. 

Facebook and WhatsApp undeniably deal with customer sensitive data which is amenable to misuse and may raise potential antitrust concerns among other data protection issues.

In the present case, the Informant has only alleged that WhatsApp/Facebook have access to data which they are using for doing targeted advertising, hence there is no concrete allegation.

Informant has also claimed that WhatsApp is in serious non-compliance with critical and mandatory procedural norms.

In view of the above allegation, Commission, do not seem to raise any competition concern and as such may not need any further scrutiny by it.

Therefore, based on the aforesaid analysis, Commission does not find alleged contravention of the provisions of Section 4 of the Act against WhatsApp or Facebook being made out. [Harshita Chawla v. WhatsApp,  2020 SCC OnLine CCI 32, decided on 18-08-2020]

Case BriefsHigh Courts

Bombay High Court: A Division Bench of Dipankar Datta, CJ and Madhav J. Jamdar, J., while addressing the instant Public Interest Litigation made an observation that,

Right to freedom of speech and expression cannot be exercised to sow seeds of hatred and to create disharmony among religious communities.

Since infammatory posts/messages have the potential of disturbing public peace and tranquility, strong action ought to be taken against those responsible to uphold the high values aimed at by the Constitution.

Communal Disharmony

It has been alleged that Abu Faizal has been posting objectionable video clips as well as offensive messages on YouTube, Facebook and other social media sites which have the potential of creating communal disharmony, a sense of enmity between Hindus and Muslims.

Police has been inactive in getting such posts removed after urging them to do so through the complaint.

In May, this Court had passed an order asking respondents to file an affidavit-in-reply.

Such order further directed investigation against the said Abu Faisal if the substance were found in the allegations made by the petitioner against him. Also, the respondents were directed to block the video uploaded on social media.

Since no step was taken by police, the said Abu Faisal has felt encouraged to post objectionable video clips/offensive messages one after the other with an intention to create unrest.

An FIR was registered by Hyderabad city Cyber Crime Cell against the said Abu Faisal under Section 153-A/269/188/505(1)(b)/505(2) of the Penal Code, 1860 read with Section 67 of Information technology Act, 2000 and during the investigation, it was found that the accused is presently in Dubai.

What did the petitioner seek in view of the above-stated facts?

Petitioner seeks orders on the State and its police force to prevent the commission of cognizable offence by the said Abu Faisal and to take steps for deletion of the offensive video clips/messages, as well as for direction on the respondents 4 to 6 to permanently block the access of the said Abu Faisal to the relevant social media sites.

It is in terms of the power conferred by Section 69A (2) of the I.T. Act that the Rules of 2009 have been framed. Such rules contain a comprehensive procedure for blocking access to information by the public.

Decision in Shreya Singhal v. Union of India, (2015) 5 SCC 1 says that there are only two ways in which a blocking order can be passed – one by the Designated Officer after complying with the 2009 Rules and the other by the Designated Officer when he has to follow an order passed by the competent Court.

In view of the above, Court held that neither the State nor its police force can issue a blocking order; it is left to the discretion of the designated officer under the 2009 Rules.

Further, the Court added that insofar as direction on the private respondents to permanently block the access of the said Abu Faisal to their corresponding social media sites is concerned, bench refrained from making any direction but left it free to the private respondents to regulate their affairs and make such exclusion as would be desirable for strong reasons of public policy of India and the integrity of the State.

The duty entrusted upon the police by Sections 149 and 150 of the CrPC to prevent the commission of cognizable offence has to be preceded with knowledge or information of a design to commit a cognizable offence.

However, in the present matter, without having any prior knowledge or information of any design of the said Abu Faisal and the probable time to commit cognizable offence by posting objectionable video clips/offensive messages and without being empowered to block access of the said Abu Faisal to social media sites, it may not be possible for the police to prevent a cognizable offence being committed by him.

Hence in view of the above, PIL was disposed of with a parting observation that,

“…People may exercise some degree of restraint on their liberty of free speech and expression particularly during these testing times.”

“…it is time that the State introduces a regime of conduct with stricter norms but satisfying the test of reasonableness, in the exercise of the power conferred by Article 19(2) of the Constitution, to deal with the rapid rise of absolutely avoidable, uncalled for and unwarranted inflammatory posts/messages on the social media.”

[Imran Khan v. State of Maharashtra, PIL-CJ-LD-VC-23 of 2020, decided on 21-08-2020]

Case BriefsHigh Courts

Madhya Pradesh High Court: Anand Pathak, J., while granting bail and directing to adhere bail conditions added a condition with regard to  “digital detoxification” wherein the applicant needs to stay away from Facebook and Whatsapp for 2 months.

Applicant filed the first application under Section 439 CrPC for grant of bail for the offence punishable under Sections 323, 294, 506/34, 327 and 329 of Penal Code, 1860.

Applicant’s Counsel submitted that a false case had been registered against him due to which he has been suffering confinement.

Further, he added that in these times of pandemic, his case is sympathetically considered. Even otherwise he learned the lesson hard way and would mend his way and would become a better citizen.

Confinement amounts to pretrial detention and further he undertakes to abide by all the terms and conditions of guidelines, circulars and directions issued by Central Government, State Government as well as Local Administration regarding measures in respect of COVID-19 pandemic. He also adds that the applicant intends to perform community service.

Court in view of the present times and on considering the peculiar fact situation stated that the applicant deserves to be released on bail.

Hence on furnishing a personal bond of Rs 50,000 along with one solvent surety of like amount, the applicant will be released and adding to the same he will have to install Arogya Setu App.

Jail authorities are directed to conduct his preliminary cronoa virus test.

After release, Court further directed the applicant to strictly follow all the instructions which may be issued by the Central Govt./State Govt. or Local Administration for combating the Covid-19.

Compliance of the following conditions by applicant is required:

  • Applicant will not indulge himself in extending inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade them from disclosing such facts to the Court or to the Police Officer.
  • applicant shall not commit an offence similar to the offence of which he is accused
  • applicant will not be a source of embarrassment or harassment to the complainant party in any manner and applicant will not seek unnecessary adjournments during the trial
  • applicant will not leave India without previous permission of the trial Court/Investigating Officer
  • Applicant shall not move in the proximity of the complainant and would always cooperate in the trial. He would not tamper the evidence and witnesses of the case.
  • Applicant shall remove himself from the WhatsApp and Facebook group and other Social Media groups for next two months and would not be present on any social media platform at all for two months for digital detoxification for personal reasons or for other reasons.
  • Every month applicant shall have to submit report about his digital detoxification at the police station concerned.

In view of the above, the application was disposed of. [Harendra Tyagi v. State of M.P., 2020 SCC OnLine MP 1684, decided on 04-08-2020]

Case BriefsHigh Courts

Delhi High Court: A Division Bench of Rajiv Sahai Endlaw and Asha Menon, JJ., dismissed the petition filed by a Lieutenant Colonel, Indian Army challenging the Social Media Ban Policy of Indian Army.

Lieutenant Colonel with the Indian Army filed a petition seeking a writ of mandamus directing respondents to withdraw their policy banning petitioners and other members of the Indian Army from using social networking platforms.

The said policy requires the petitioner and other members of the Indian Army to delete their accounts from social networking platforms like Facebook and Instagram.

Petitioner also sought a declaration that respondent 2 Director General of Military Intelligence is not empowered under the Constitution of India or under any other law, to modify, amend or abrogate the fundamental rights of the petitioner and other members of the Armed Forces.

Bench on perusal of the policy as well as other voluminous documents, stated that the policy is:

  • an outcome of constantly evolving intelligence of security threats and assessment of security safeguards needed
  • to plug the gaps and meet the ever-threatening electronic and cyberinfrastructure
  • an outcome of the paradigm shift in the intelligence activities of hostile nations; increased popularity of various social media platforms; the vulnerability of unsuspecting military personnel
  • necessitated by the directives, instructions and policies issued from time to time, advising the military personnel to regulate the use of social media websites, failing to meet the threat
  • virtual impossibility to keep track of lacs of online profiles or to identify the fictitious enemy profiles
  • on assessment of the different modes adopted to honey trap, not necessarily in the conventional sense ;
  • an outcome of the assessment of the vulnerability of different social media platforms.

Further, Bench relied on the Supreme Court decision in Ex-Armymen’s Protection Services (P) Ltd. v.  Union of India (2014) 5 SCC 409, wherein it was held that (i) the decision on whether the requirements of national security outweigh the duty of fairness on a particular case is for the government and not for the Courts; the government alone have access to the necessary information and in any event, the judicial process is unsuitable for reaching decisions on national security; (ii) those who are responsible for the national security must be the sole judges of what the national security requires and it is undesirable that such matter should be made the subject matter of evidence in a Court of law or otherwise discussed in public; (iii) what is in the interest of national security is not a question of law – it is a matter of policy and it is not for the Court to decide whether something is in interest of State or not; and, (iv) once the State is of the stand that the issue involves national security, the Court shall not disclose the reasons to the affected party.

High Court on perusal of the impugned policy found the same be suffering from the vice of non-application of mind or being not based on any material on record or being without proper deliberations.

Court stated that it does not appreciates the pleading of the petitioner as a senior officer in the Army, of army personnel being treated as slaves and the government not trusting its army.

Court noted that warfare and inter-country rivalries and animosities today are not confined to accession of territory and destruction of installations and infrastructure of enemy countries but also extend to influencing and affecting the economies and political stability of enemy country including by inciting civil unrest and disturbance and influencing the political will of the citizens of the enemy country.

Hence, if the government on complete assessment has concluded that permitting the use of certain social networking websites by defence personnel enables the enemy countries to gain an edge, Court would be loath to interfere.

In view of the above, the petition was dismissed. [Lt. Col. P.K. Choudhary v. UOI, 2020 SCC OnLine Del 915, decided on 05-08-2020]


Brief News 

Delhi High Court dismisses the challenge to the Court’s Order wherein an Indian Army Personnel was directed to delete his social media accounts from “Facebook” and Instagram in consonance of the Social Media Ban Policy for Indian Army.

Earlier, a petition was filed impugning the policy of respondent 2 Director General of Military Intelligence, to the extent it bans the petitioner and other members of Indian Army from using social networking platforms like Facebook and Instagram.

To the said petition, Bench had stated that only after perusing the policy counsels be heard.

“we are of the view that the counsels be heard after we have had an occasion to peruse the policy and if the document prescribing the policy does not record the reasons therefor, the document containing the reasons for the policy.”


Read More:

Del HC | Indian Army’s policy of social media ban for its members to be submitted in a sealed cover for perusal of Court

Case BriefsHigh Courts

Delhi High Court: Anup Jairam Bhambhani, J., directed the the Delhi Police to assure that the immediate removal of a law student’s pictures from the Pornographic Website should be done as the images were taken without her consent from the social media platforms.

Petitioner who is a law student from Bangalore complained that her pictures that she had posted on social media platforms ‘Instagram’ and ‘Facebook’ have mischievously and illegally been lifted and placed by respondent’s 6 and 5 — Pornographic website along with derogatory captions.

An online complaint to DCP-South on 11-07-2020 was filed, but no action was taken.

Petitioner’s counsel, Sarthak Maggon submitted that petitioner verily believes that respondent 5 is a spurious website, which carries pornographic content and which ought to have been banned and taken down from the world-wide web by the competent authorities.

Respondent 5 unauthorizedly and illegally in utter violation of the provisions of Information Technology Act, 2002 and Penal Code, 1860 placed the petitioner’s photographs on that website.

By reason of the inaction on the part of the authorities, these photographs have already received 15,000 views.

Rahul Mehra, Counsel for respondent 2/State of NCT of Delhi submitted that urgent and immediate steps would be taken to first take down the petitioner’s photographs that have been uploaded onto the errant website and subsequently necessary investigation will be carried out to trace and punish the offenders.

Bench directed that the complaint made by the petitioner be transferred to the Cyber Prevention Awareness and Detection Unit (CyPAD) of Delhi Police and that immediate action as assured be taken to remove the petitioner’s photographs from the errant website. Matter to be listed on 30-07-2020. [X v. UOI, 2020 SCC OnLine Del 761 , decided on 17-07-2020]

Business NewsNews

CCI approves acquisition of 9.99% stake in Jio Platforms by Facebooks’ subsidiary Jaadhu Holdings LLC

The Competition Commission of India (CCI) approves acquisition of 9.99% stake in Jio Platforms by Jaadhu Holdings LLC. The proposed combination envisages acquisition of approximately 9.99% stake in Jio Platforms Limited (Jio Platforms)by Jaadhu Holdings LLC (Jaadhu).

Jaadhu is an indirect wholly owned subsidiary of Facebook. Jaadhu is a newly incorporated company formed in March 2020 under the laws of the State of Delaware, United States. Facebook is a publicly traded company listed on NASDAQ, with headquarters in California, United States of America. Facebook was founded in 2004. Its mission is to give people the power to build community and bring the world closer together. The Facebook group offers various products and services that help people connect to their friends and family, find communities, and grow businesses.

Jio Platforms is a company organised and existing under the laws of the Republic of India, and a subsidiary of RIL. Jio Platforms owns (directly or indirectly) and operates digital applications and holds controlling investments in certain technology related entities. Jio Platforms also holds 100% of the issued and outstanding share capital of Reliance Jio Infocomm Limited (RJIL). RJIL is a public limited company incorporated in India, and is a licensed telecommunications operator, providing telecommunications services to users across the country.


Ministry of Corporate Affairs

Press Release dt. 25-06-2020

Case BriefsHigh Courts

Manipur High Court: A Division Bench of Lanusungkum Jamir and Kh. Nobin Singh, JJ., initiated contempt proceedings, wherein Additional Superintendent of Police is stated to have posted derogatory, defamatory and contemptuous post in her face book account against the Special Judge (ND&PS) in particular and against the Judiciary in general.

Bench had posed three questions to respondent 1 (Th. Brinda, MPS presently serving as Additional Superintendent of Police), Head Quarter, which were as follows:

a) Whether she has threatened the witness in the Court of the learned Special Judge, ND&PS on 21-05-2020.

b) Whether she showed her middle finger to the learned Special Judge, ND&PS on 21-05-2020.

c) Whether she has posted derogatory, defamatory and contemptuous post in her face book account against the Special Judge (ND&PS) in particular and against the Judiciary in general.

Further, the Court considered the the letter written by Superintendent of Police (CID-CB) and addressed to the Registrar General, High Court of Manipur giving the details of 20 (twenty) facebook account holders who have been tentatively identified based on the publicly available information and photos posted in their facebook.

Notice has been issued by the Court.

Respondent 2 was also directed to continue collecting and verifying details of persons who keep on uploading posts scandalizing the Judiciary in connection with the present case.

Matter to be listed on 17th June, 2020. [In Re-Criminal Contempt against Thounaojam Brinda v. Thounaojam Brinda, MPS,  2020 SCC OnLine Mani 113 , decided on 10-06-2020]

Business LawOp EdsOP. ED.

Facebook is investing $5.7 billion or INR 43,574 crore to get close to 10% equity in Jio Platforms Limited.  In its press release[1], the social media giant expressed its intention to connect Jio’s e-commerce platform, JioMart, to small businesses and shops via “the power of WhatsApp” in order to make online shopping a seamless mobile experience. The Jio-Facebook deal announced last week promises to push India’s digital transformation to new heights. However, out of a number of regulatory approvals, Competition Commission of India’s (CCI) approval is the most crucial one. To consummate a deal that crosses the thresholds mentioned under Section 5 of the Competition Act, 2002, CCI’s approval is mandatory. Section 6 sub-section (2) read with Regulation 5 of the Combination Regulations[2] evidences a suspensory regime i.e. the approval must be obtained prior to closing of the deal in the country.

 The deal, as ambitious as it sounds, can run into anti-trust issues. Firstly, the multi-billion-dollar investment into Jio will have to be notified to and approved by India’s competition regulator. For that to happen, CCI will have to take a forward-looking approach and check that the proposed combination does not have potential to cause appreciable adverse effect on the competition in the market. To safeguard the investment from the protectionist approaches of Indian regulators is a crucial factor in consummating the deal and, subsequently, carrying it forward smoothly. Despite the criticism to protectionist regulatory regime, CCI tends to adopt a liberal approach[3]. In the approved RIL-Brookfield tower infrastructure deal, the two were found to be vertical participants and CCI went ahead to analyse if there were any vertical overlap. With RIL’s acquisition of stake in Saudi AramCo at hold, it needs to be more careful with the investment and regulatory concerns with the activities of its digital arm, Jio.

 The strategic investment for acquiring the minority stake is not simply a passive investment. The filing of notice as per Regulation 4 of the Combination Regulations in itself is indicative of the fact that the transaction is not in the ordinary course of business and is backed with an intent of strategic investment to bring in change in control. Thus, the responsibility of CCI is to peruse not only the potential adverse effects on competition but also the potential concerns it may give rise to. It would be interesting to see whether the acquisition of minority stake in India’s leading telecom arm would grant any control to Facebook. Let us look at the possible anti-trust issues that the deal poses:

Dominance: Boon or a bane?

Both Jio and Facebook seem to be dominant players in their respective markets. The  Telecom Regulatory Authority of India’s data points to the fact that Jio has the highest market share in terms of user base and revenue sharing in the telecom market as it holds 32% share in the 1.15-billion-user Indian mobile services market, taking its total user base to 369.93 million, surpassing its competitors Bharti Airtel and Vodafone-Idea. It must also be noted that, unlike others, all Jio connections are 4G based, thus, having a strong base of smartphone users.

Now, Facebook primarily operates via three platforms: facebook.com, Instagram and WhatsApp. All of them seem to be dominant players in the market they operate in. We are only concerned with WhatsApp. Its relevant market seems to be smartphone-based social media messaging platform. WhatsApp has more than 400 million[4] confirmed users in India, while around 600 million[5] people have access to internet[6] in the country. Other competitors to WhatsApp in India are hike, WeChat, Telegram, which only have a fraction of the users as WhatsApp.

Jio plans to revolutionise JioMart by combining it with WhatsApp to integrate small and medium scale ‘kirana’ businesses to cater to the demand. This would firstly strengthen the position of mom-pop shops in the local market by sewing them into the digital framework and secondly would attempt to penetrate into another market by using the dominance of WhatsApp.

More so, WhatsApp could possibly allow JioMart to operate on its messaging platform. If done so, and in the manner that WhatsApp comes with pre-embedded JioMart platform, it could lead to abuse of dominance under Section 4(2)(d) as installing WhatsApp would be the main contract and pre-embedded JioMart would be the unconnected supplementary obligation. This would also mean that the users would not be allowed to embed any other e-commerce portal on WhatsApp messenger, which would again seem to be causing disruption in the competition in the market and unfair to consumers as it would leave no choice to them but accept the imposed deal.

Another advantage post the deal would be of control over consumer data. As of now, RIL Chief has said that there is no agreement for transferring of consumer data between the parties; however, this does not erode the possibility of entering into such agreements in the near future. While control over data has been used by Competition Regulators in examining the e-commerce and digital platforms’ anti-competitive conduct (viz. Amazon-Flipkart case[7], Sonam Sharma v. Apple Inc. USA[8]), this factor in the present case must be dealt with utmost seriousness and conviction to ensure survival of healthy competition in the e-commerce market, especially at a time when Facebook has been imposed with $5 billion fine over data privacy violation[9].

Appreciable Adverse Effect on Competition: Is it too soon?

Where the strategic investment is with the intent to enter into a different segment using the control in respective markets to enter into an entirely different product market, the parameters to check the potential adverse effect on the competition must be comprehensive. In re, Google LLC[10], CCI observed that there is a need to not only delineate primary relevant market but also associated markets to relevant markets that have been affected by the conduct of the parties involved. Section 20 sub-section (4) lists the factors that CCI must consider to conclude if there is any appreciable adverse effect on the competition because of the proposed combination.

The essence of this checklist is to look for horizontal or vertical overlap in the activities post acquisition. While there seems to be no horizontal overlap, there definitely could be a case of vertical integration. Jio provides internet to smartphone, smartphones use internet to operate WhatsApp and now WhatsApp would integrate JioMart. It is not only vertical integration but use of dominant position in one market to enter into a new market, and thus would be likely to effect adversely the natural competition in the ‘phygital’ commerce market (as has been recently termed).

The analysis must be based not only on the market share of the deal participants both pre and post-acquisition but must also mindfully address the data sharing aspect of the deal, considering these data mammoths’ conduct in the recent past. The US Court imposing record $5 billion fine on Facebook for privacy violations is in itself a warning for the Indian regulators to intervene in this far reaching deal especially, to protect the Indian start-up movement that is also an important wing of the Digital India flight. The deal no doubt has potential of creating business and commercial barriers for local tech start-ups. The primary purpose of the merger control regime is to foresee adverse effects and to live up to this objective, CCI must take cognizance of the interrelatedness of this deal.

One can at the same not ignore the importance of balance between the commercial interest and the consumer welfare interests. Though the weighing scale can never be equal for both, what is important for CCI as a regulator of omnipotent economic concerns is that it shouldn’t step on the commercial prospects deal participants like such to ensure distributive justice.

The deal will undoubtedly push the CCI’s merger control jurisprudence into a comprehensive one and shall be significant in laying down a vigilant yet compendious framework for future deals. While we are still speculating about the nature of the deal, JioMart has started testing WhatsApp for grocery orders in pursuance of the proposed deal. “The customer initiates the interaction on WhatsApp, checks out the grocery order on JioMart webpage, gets connected with a retail store on WhatsApp and then customer picks up the order from Kirana and pays in cash,” said the news report[11].


*Prateek and Samanvi are pursuing Master of Laws (LL.M.) in Corporate and Commercial Law from Nalsar University of Law, Hyderabad

[1] Press release by Facebook (21.02.2020), https://about.fb.com/news/2020/04/facebook-invests-in-jio/

[2] Competition Commission of India (Procedure in regard to the transactions of business relating to combinations) Regulations, 2011 

[3] CCI has cleared over 600 combinations, and has not blocked even a single one. Only eight were subject to detailed Phase II enquiry, India: Merger Control (4th Edn.), AZB Partners, https://www.azbpartners.com/bank/india-merger-control-4th-edition/,

[4] Manish Singh, WhatsApp reaches 400 million users in India, Tech Crunch, (26.07.2020), https://techcrunch.com/2019/07/26/whatsapp-india-users-400-million/

[5] Sanika Diwanji, Number of internet users in India from 2015 to 2018 with a forecast until 2023, Statista, (31.03.2020), https://www.statista.com/statistics/255146/number-of-internet-users-in-india/

[6] PTI, Internet users in India to reach 627 million in 2019, Economic Times, (06.03.2019)

[7] Delhi Vyapar Mahasangh v. Flipkart Internet Private Limited

[8] 2013 SCC OnLine CCI 25

[9] AFP, Cambridge Analytica: US Court Approves Record $5 Billion Fine of Facebook Over Privacy, NDTV (25.04.2020)

[10] Umar Javeed v. Google LLC, Case No. 39 of 2018, dated 16-4-2019

[11] Reliance Begins Using Whatsapp for Grocery Deliveries Through JioMart, Business Standard, (27.04.2020)

Case BriefsHigh Courts

Delhi High Court: Pratibha M. Singh, J. while addressing a petition concerning the protection of the trademark ‘DA MILANO’, issued certain guidelines for the online intermediaries involved and held as follows:

“Role of Facebook and Instagram, insofar as posts put up by concerned third parties is governed by the Information Technology (Intermediaries Guidelines) Rules, 2011. Considering the provisions of the stated guidelines, online platforms which claim to be intermediaries not performing any active role in the posting of such information by 3rd party alleged infringers, have a duty only to take down the posts which are brought to their notice by plaintiff in terms of Section 79(3).

The above-mentioned guidelines along with Section 79(3) of the IT Act have been interpreted by a very significant Supreme Court case of Shreya Singhal v. Union of India, (2015) 5 SCC 1, “to mean that “any information received by the platforms would be by means of a Court order”.

In Shreya Singhal case, pertaining to Section 79 (3)(b), following was held which is relevant in respect to the present matter:

“Section 79(3)(b) has to be read down to mean that the intermediary upon receiving actual knowledge that a court order has been passed asking it to expeditiously remove or disable access to certain material must then fail to expeditiously remove or disable access to that material. This is for the reason that otherwise it would be very difficult for intermediaries like Google, Facebook, etc. to act when millions of requests are made and the intermediary is then to judge as to which of such requests are legitimate and which are not.”

The facts in the present case are that the plaintiff who claims to be the owner of ‘DA MILANO’ filed a suit against the Defendants 1 to 4 in respect to seek permanent injunction, restraining infringement of trademark and passing off and under Section 74 of IT Act, 2000 seeking protection of the trademark ‘DA MILANO’.

It has been further stated that, Defendants 1 to 4 are alleged infringers who have posted on “Facebook” and “Instagram” advertising and offering to sell products bearing the mark ‘DA MILANO’. Plaintiff while seeking a permanent injunction against infringers impleaded the stated online platforms to ensure that posts comprising the infringing marks are taken down.

Trial Court, had sought the personal appearance of Facebook and Instagram in the present matter. Therefore, the grievance was the direction of personal appearance of the representatives of Facebook and Instagram.

Senior Counsel, Parag Tripathi, submitted that his clients are willing to comply with interim order which has already been passed and since the said defendants are not contesting the matter on merits against the plaintiff and are merely intermediaries; their personal presence is not required.

High Court on perusal of the facts and the guidelines mentioned above along with relying on the Supreme Court case of Shreya Singhal v. Union of India, (2015) 5 SCC 1, agreed on the fact that the stated platforms are mere intermediaries and have no active role in the matter, which therefore demands no personal appearance. Further, the following directions were issued:

  • Plaintiff shall inform Instagram and Facebook whenever they came across use of the mark ‘DA MILANO’ either in word form, logo or in any other form on their platforms.
  • Once such information is received, as per Rule 3(4) of the 2011 Guidelines, the said posts shall be taken down, within the timelines prescribed.
  • If platforms have any doubt as to the violative or offending nature of posts, they shall intimate the plaintiff.
  • Upon any order being passed by a Court of competent jurisdiction, the same shall be intimidated to the platform, which shall abide by the said order.

Thus, the suit is decreed against Facebook and Instagram in the above terms. [Facebook Inc. v. Surinder Malik, 2019 SCC OnLine Del 9887, decided on 28-08-2019]

Hot Off The PressNews

Supreme Court: While hearing Facebook Inc’s petition asking Supreme Court to hear all cases related to demands for linking Aadhaar to social media accounts and tracing the source of WhatsApp messages, the Court said that there has to be a balance between privacy and how to govern. The court, hence, issued notice to Facebook, Twitter, Google, YouTube, the centre and Tamil Nadu asking for their response by September 13 on whether the petitions should be transferred from high courts across India to the Supreme Court. Various cases are being heard by the high courts of Madras, Bombay and Madhya Pradesh and Orissa.

The Court said,

“There is a conflict between privacy and how the government should run the country when crimes are committed. There has to be a balance… under what condition information can be given and to whom,”

Facebook and WhatsApp, asking that all petitions be transferred to the top court, said it was a matter of high magnitude and affected the privacy of the entire nation.

On Monday, the Tamil Nadu government had told the Supreme Court that social media profiles of users need to be linked with Aadhaar numbers to check the circulation of fake, defamatory and pornographic content as also anti-national and terror material. However, Facebook Inc resisted the state’s suggestion on grounds that the sharing of the 12-digit Aadhaar number, the biometric unique identity, would violate privacy policy of users.

Facebook Inc said it cannot share the Aadhaar number with a third party as the content on its instant messaging WhatsApp was end-to-end encrypted and no one can access it.

The Tamil Nadu government, which is deep into a case related to the deadly Blue Whale game, argued that the centre was struggling to find out who the creator of the game was and who gives directions. Attorney General KK Venugopal, representing Tamil Nadu, said,

“Someone says he is a young person from Russia. A number of people have died in India playing the Blue Whale. Let the Madras High Court continue with its hearing,”

The Supreme Court said,

“We are aware of Blue Whale. What is happening in dark web is worse than Blue Whale. The idea of the Madras High court expanding the issue was that if need be, shouldn’t the intermediary inform the police about details of person for crime detection? We are not examining the merits of the case, only dealing with the transfer of the cases to the Supreme Court.”

(Source: NDTV)

Hot Off The PressNews

Under the Code, Participants have voluntarily undertaken to establish a high priority communication channel with the nodal officers designated by ECI. Participants including BIGO, ByteDance, Facebook, Google, Sharechat and Twitter have also agreed to take action on content reported by the nodal officer, expeditiously, in accordance with the law.

The Chief Election Commissioner in his remarks appreciated the proactive steps taken by the Association and its members [participants] to ensure transparency in regards to paid political advertisement by maintaining a repository of political advertisement with information such as the sponsor, expenditure and targeted reach of such content in an aggregated manner. Participants have built the technology to upload MCMC certification. Participants have also committed to taking action on paid advertisements violating MCMC certification requirement under notification by the ECI.

IAMAI will act as the liaison between the Participants and the ECI. Collectively, IAMAI and the member Participants of the Code of Ethics remain committed to ensuring free, fair, and ethical electoral process.

Case BriefsHigh Courts

Delhi High Court: A Single Judge Bench comprising of J.R. Midha, J., in an order directed Facebook Inc., Google LLC, YouTube LLC to remove the content as mentioned by the plaintiffs (Patanjali Ayurved Ltd.) to defame them from their respective portals.

The plaintiffs stated that videos containing slanderous, defamatory and absolutely false statements about the plaintiffs were uploaded and shared on the portals of Defendants 2 to 4 and in order to get rid of that the plaintiffs had sent a notice for the removal of such videos to the Defendants. The Defendants denied doing so as they sought for a Court order from the plaintiffs for the said act.

Further, plaintiffs submitted that the whole mechanism of approaching the Court in itself is an unreasonable and unfair procedure as it puts the citizens to a heavy cost of litigation.

Therefore, on approaching the High Court, the list of URLs published and shared on the portals of the defendants pertaining to the videos which contained slanderous and defamatory content were asked to be removed or blocked/restricted to access. Also, Defendant 1 was restrained from giving any interview in print, electronic, social media till the next date of hearing. Further, the Court asked the defendants to comply with the provisions of Order XXXIX Rule 3 of CPC. [Patanjali Ayurved Ltd. v. Meera Singh,2018 SCC OnLine Del 10543, Order dated 10-08-2018]

 

 

Case BriefsInternational Courts

European Court of Justice: The ECJ recently held that the data protection authority of the Member State in which the administrator has its seat may, under Directive 95/46/EC of the European Parliament and of the Council of 24-10-1995 on data protection (OJ 1995 L 281, p. 31), act both against the administrator and against the Facebook subsidiary established in that Member State.

In this case, a German company operated in the field of education and offered educational services inter alia by means of a fan page hosted on Facebook. Administrators of fan pages could obtain anonymous statistical data on visitors to the fan pages via a function called ‘Facebook Insights’ which Facebook made available to them free of charge under non-negotiable conditions of use.

By decision of 3-11-2011, the Independent Data Protection Centre for the Land of Schleswig-Holstein, Germany as supervisory authority (the authority) within the meaning of Directive 95/46 on data protection, ordered one of the administrators to deactivate its fan page. According to the authority, neither administrator nor Facebook informed visitors to the fan page that Facebook, by means of cookies, collected and processed personal data concerning them. Administrator brought an action against that decision before the Federal Administrative Court, Germany which asked ECJ to interpret Directive 95/46. Administrator argued that the processing of personal data by Facebook could not be attributed to it and it had not commissioned Facebook for that purpose.

ECJ started by observing that it was not disputed that the American company Facebook and, for the EU, Facebook Ireland must be regarded as ‘controllers’ responsible for processing the personal data of Facebook users and persons visiting the fan pages. Next, the Court found that an administrator must be regarded as a controller jointly responsible with Facebook Ireland for the processing of that data. Court observed that administrator takes part, by its definition of parameters (depending in particular on its target audience and the objectives of managing or promoting its own activities), in the determination of the purposes and means of processing the personal data of the visitors to its fan page. Administrator of the fan page can ask for demographic data and request its processing including in terms of age, sex, relationships and occupations, information on the lifestyles and centres of interests of the target audience telling the fan page administrator where to make special offers and organise events and more generally enabling it to target best the information it offers. So, an administrator who makes use and benefits from the associated services of Facebook cannot be exempted from compliance with its obligations concerning the protection of personal data.

In addition, the Court found that the authority was competent, for the purpose of ensuring compliance in German territory with the rules on the protection of personal data, to exercise with respect not only to administrators but also to Facebook Ireland all the powers conferred on it under the national provision transposing Article 28(3) of Directive 95/46. The same provision further entitles it to exercise those powers with respect to Facebook Germany even though it was not responsible for collecting and processing personal data due to division of work. [Unabhängiges Landeszentrum für Datenschutz Schleswig-Holstein v. Wirtschaftsakademie Schleswig-Holstein GmbH, Case C-210/16, order dated 05.06.2018]

Hot Off The PressNews

The Brussels Court of First Instance on Friday, cautioned popular social networking site Facebook to stop collecting data on users or face fines up to 100 million euros ($125 million). In a suit brought by the Belgian Privacy Commission, the Court observed that Facebook had broken privacy laws by tracking people on third-party sites and by informing the users insufficiently about gathering information about the users,
The Court also ruled that Facebook must delete all data it had gathered illegally on Belgian citizens, including people who were not Facebook users themselves.
[Source Reuters]

Case BriefsSupreme Court

Supreme Court: In the light of the data privacy concerns raised before the Court in the matter relating to Whatsapp data sharing with it’s parent company Facebook, the 5-judge bench of Dipak Misra, CJ and Dr. AK Sikri, Amitava Roy, AM Khanwilkar and MM Shantanagoudar, JJ asked Senior Advocates Kapil Sibal and Arvind Datar, appearing for Whatsapp and Facebook, to file affidavits with regard to the assertions made by the petitioners within 4 weeks.

Additional Solicitor General Tushar Mehta brought to the Court’s notice that a committee headed by Former Supreme Court judge, Justice B N Srikrishna, was being formed to deliberate on a data protection framework for India keeping in mind the need to ensure growth of the digital economy while keeping personal data of citizens secure and protected. He further submitted there was a possibility that the law shall be passed regulating the data protection once the committee submits it’s report. Arvind Datar also submitted that the 9-judge bench, in Justice KS Puttaswamy v. Union of India, 2017 SCC OnLine SC 996, had expressed the view that there should be a law with regard to data protection.

Refusing to pass any interim order restraining the respondent from sharing the data with the third party, the Court said that it will consider passing interim order after the affidavits are filed and if the assertions made in the affidavit would not require any kind of intervention by this Court, this Court may not pass any interim order. The matter will next be taken up on 20.11.2017. [Karmanya Singh Sareen v. Union of India, 2017 SCC OnLine SC 1051, order dated 06.09.2017]