Meta Challenges CCI's Rs 213 Crore Penalty Ruling Over WhatsApp Privacy Policy

Meta Platforms Inc (formerly Facebook Inc) has filed an appeal with the National Company Law Appellate Tribunal (NCLAT) against the Competition Commission of India's (CCI) Rs 213.1 crore penalty. The penalty, imposed in November 2022, cited "abuse of dominant position" by WhatsApp in implementing its 2021 privacy policy.

Representing Meta, senior advocates Kapil Sibal and Mukul Rohatgi appeared virtually, seeking an urgent hearing. They argued that the CCI’s order has "far-reaching implications for the industry at large." The NCLAT acknowledged their plea and scheduled the hearing for 16 January.

The CCI issued a cease-and-desist order last year, directing Meta and WhatsApp to implement specific behavioural changes within a set timeframe. The regulator found that WhatsApp’s 2021 privacy policy update was enforced on a "take-it-or-leave-it" basis, compelling users to accept an expanded data-sharing arrangement with other Meta entities without offering an opt-out option.

The investigation revealed that such practices hindered fair competition in the Over-The-Top (OTT) messaging and online display advertising markets. The CCI determined that Meta's actions violated Sections 4(2)(c) and 4(2)(e) of the Competition Act.

Key directives issued by the CCI include a five-year restriction on WhatsApp sharing user data with other Meta companies for advertising purposes. Beyond this period, WhatsApp must provide a compelling justification for any data-sharing and ensure it is not a condition for accessing WhatsApp services.

Additionally, all Indian users, including those who had previously accepted the 2021 policy, must be given an in-app notification offering the option to opt out of data sharing.

The appeal is being closely watched due to its potential impact on privacy, competition and data-sharing practices in India's digital ecosystem.