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A bench of the National Company Law Appellate Tribunal (NCLAT) is set to hear on 16 January an appeal by Meta Platforms against an order by India’s competition regulator that levied a penalty on the US tech giant for allegedly abusing its dominant position.
Meta Platforms, formerly known as Facebook, approached the NCLAT on Monday against the order of the Competition Commission of India (CCI), which asked the company to pay a penalty of ₹213.14 crore for abusing its dominant position in relation to the 2021 privacy policy update of its messaging app WhatsApp.
Meta asked the NCLAT to hear the case urgently, noting its implications and the stakes involved. The NCLAT bench led by Chairperson Justice (Retd) Ashok Bhushan agreed and scheduled the hearing for 16 January.
On 18 November 2024, the CCI ordered WhatsApp not to share user data with other Meta companies or products for advertising purposes for five years, according to a statement by the regulator. The CCI considers Meta a dominant player in internet-based messaging through WhatsApp and also in online display advertising.
For purposes other than advertising, WhatsApp’s policy should include a detailed explanation of the user data shared with Meta group companies or products, specifying the purpose, the CCI said.
The regulator also said that sharing WhatsApp user data with other Meta companies or products for purposes other than providing WhatsApp services should not be a condition for users to access the messaging service in India. The order upholds user consent as a key principle in the functioning of social media giants, similar to measures taken by other countries.
In December 2021, Germany’s data protection commissioner temporarily banned Facebook from processing the WhatsApp data of users. Ireland’s Data Protection Commission imposed a fine on WhatsApp in 2021 for a previous privacy policy update requiring users to accept these terms, before the EU rolled out its General Data Protection Regulation (GDPR) in 2018, as reported by Mint on 14 October.
WhatsApp’s 2021 privacy policy update discussed how businesses could use Facebook-hosted services to store and manage their WhatsApp chats with customers. The competition watchdog concluded that WhatsApp’s sharing of users’ business transaction information with Meta gave the group entities an unfair advantage over competing platforms.
The CCI said WhatsApp’s policy update, which was presented on a “take it or leave it” basis, imposed an unfair condition by compelling all users to accept expanded data collection terms and the sharing of data within the Meta group without any opt-out. According to the regulator, this undermined user autonomy and constituted an abuse of Meta’s dominant position.
Meta maintained that user privacy is a top priority and asserted that the 2021 policy update did not affect the privacy of users' personal messages. The company clarified that users who did not accept the updated policy could continue using WhatsApp without losing functionality or having their accounts deleted.
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