Meta to appeal against CCI penalty order

Social media giant Meta said on Tuesday it will appeal against Competition Commission of India’s (CCI) imposition of ₹213 crore penalty for WhatsApp’s 2021 privacy policy update allegedly breaching the competition law.

A spokesperson for Meta said that the company disagreed with CCI’s decision and is planning to appeal against it. The move suggests the case will slip into litigation in spite of a government scheme for settlement introduced last year. CCI orders are contested before the National Company Law Appellate Tribunal (NCLAT) and then before the Supreme Court.

Meta’s defence

Meta said the 2021 update did not change the privacy of people’s personal messages and was offered as a choice for users at the time. “We also ensured no one would have their accounts deleted or lose functionality of the WhatsApp service because of this update.”

The Meta spokesperson said the update was about introducing optional business features on WhatsApp, and provided further transparency about how we collect and use data. “And since that time, WhatsApp has been incredibly valuable to people and businesses, enabling organizations and government institutions to deliver citizen services through covid and beyond, and as well as supporting small businesses, all of which furthers the Indian economy. WhatsApp is able to do all of this because it offers services supported by Meta.”

CCI on Monday imposed the penalty on Meta for allegedly abusing its dominant position as the 2021 privacy policy update of its messaging app WhatsApp undermined users’ ability to opt out of getting their data shared with the group’s social media platform Facebook, Mint reported on Tuesday.

“We are committed to finding a path forward that allows us to continue providing the experiences that people and businesses have come to expect from us,” the Meta spokesperson said.

Regulatory implications and expert opinions

CCI, in its 156-page order signed off by the chairperson Ravneet Kaur and two other members, said that ‘the relevant turnover’ for penalty computation is WhatsApp’s India turnover and Meta’s turnover from display advertisement services in India.

“User data is crucial in offering targeted advertisements creating a lock-in for advertisers to prefer Meta over rivals. This is corroborated by the ever-increasing revenue numbers for Meta from display advertising,” CCI said in its order.

The regulator said that considering the “nature and gravity of contravention” as well as nature of the industry or sector affected by the contravention, an amount of 4 % of the average total relevant turnover is the basis for deciding the penalty to be imposed on the parties.

"CCI’s penalty against Meta sends a strong message to social media and e-commerce platforms about the critical importance of safeguarding user privacy and ensuring informed consent,” said Nilesh Tribhuvann, managing partner of Mumbai-based White & Brief - Advocates & Solicitors.

“This decision could reshape the digital landscape in India by compelling companies to move away from blanket ‘take-it-or-leave-it’ policies that restrict user choice. For social media and e-commerce players, the ruling emphasizes the need for greater transparency in data practices and the adoption of user-centric policies,” said Tribhuvann.

It also signals a trend of heightened regulatory scrutiny that could influence global tech giants to align their practices with India’s evolving data protection standards, said Tribhuvann. He added that this could have long-term implications for how companies monetize data, design user experiences, and comply with stricter regulatory regimes.