NCLAT to decide on Meta, WhatsApp plea for stay on ₹213 crore CCI penalty next week

The National Company Law Appellate Tribunal (NCLAT) on Thursday said that it would decide on January 23 the application filed by Meta for stay of a Competition Commission of India (CCI) order imposing a penalty of ₹213.14 on the tech giant..A coram of Chairperson Justice (retd) Ashok Bhushan and Technical Member Arun Baroka said, "We have heard the counsels for parties. We find that submissions made by parties need consideration. We admit both the appeals. Orders on interim reliefs next Thursday.".During the course of the hearing, Senior Advocates Kapil Sibal and Mukul Rohatgi, who appeared for the Meta and WhatsApp, contended that the CCI had overstepped its jurisdiction by ruling on WhatsApp's privacy policy as the matter is sub-judice before a Constitution Bench of the Supreme Court. Sibal said, "This has absolutely far-reaching implications in several dimensions. CCI has gone into privacy policy of the entity. It is before 5 judges of the Supreme Court. It has no jurisdiction to deal with it."Sibal contended that the order was in essence destroying WhatsApp's business model. He argued that India's data privacy law will come into effect in the middle of 2025 and the CCI's order will bear no meaning since the dispute will be governed by the privacy law. Rohatgi said, "WhatsApp is free. Everybody is sending messages from Good Morning to Good Night. Nobody can survive on a free model. This is not a sinister sharing. This is a benign kind of a sharing. Therefore somebody has to understand what is this sharing. Today, if you use your credit card in any part of the world, the credit company will know where you are. This is only an update of 2016 policy. In the Constitution Bench matter specifically, this update was filed in an IA. Supreme Court refused to stay. "Advocate Samar Bansal, who appeared for the CCI, argued that there was no overlap between the case in the Supreme Court and the investigation conducted by the CCI. He said, "Data privacy law will only look at personal data, Competition law looks at business data. Indian users do not have an opt out policy; it's not the same case with Europe.".The case stems from a November 2022 decision by the CCI, which imposed a ₹213.14 crore penalty on Meta for exploiting its dominant position through WhatsApp's 2021 privacy policy. The CCI also issued cease-and-desist orders requiring Meta and WhatsApp to implement behavioural remedies within a stipulated timeline.WhatsApp's 2021 privacy policy update, effective February 8, 2021, required users to accept expanded data sharing with Meta as a condition for using the platform, unlike its 2016 policy, which allowed users to opt out. The update raised concerns over data privacy and user autonomy, prompting the CCI to investigate alleged violations of the Competition Act, 2002..The CCI concluded that WhatsApp held a dominant position in India's smartphone messaging and online display advertising markets and that the 2021 policy constituted a "take-it-or-leave-it" approach. The mandatory acceptance of expanded data sharing imposed unfair conditions, undermining user autonomy and breaching the Competition Act, 2002, the competition regulator held.As part of its directive, the CCI barred WhatsApp from sharing user data with Meta or its affiliated companies for five years. Additionally, WhatsApp was instructed to clearly outline the purposes of data sharing in its privacy policy, linking each type of data to its specific use.The CCI also mandated that WhatsApp should not make data sharing a prerequisite for users to access its services in India. Data sharing for advertising purposes was particularly restricted under the directive..CCI imposes ₹213.14 crore penalty on Meta for abuse of dominant position