The National Company Law Appellate Tribunal (NCLAT) on Thursday stayed the order of Competition Commission of India (CCI) which had directed WhatsApp not to share data collected on its platforms with Meta company or its products for five years..A coram of Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka said, "Ban of 5 years may lead to the collapse of business model of WhatsApp LLC since the platform is free. We are of the view that ban of 5 years need to be stayed."The NCLAT further stayed the penalty of ₹213.14 crore subject to WhatsApp/Meta depositing 50 percent of the amount. A detailed copy of the order is awaited. .In November 2024, the CCI had imposed a ₹213.14 crore penalty on Meta for abusing its dominant position through WhatsApp's 2021 privacy policy. The CCI had also issued cease-and-desist orders, requiring Meta and WhatsApp to implement behavioral remedies within a specified timeline.WhatsApp's 2021 privacy policy update, effective February 8, 2021, require 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 2021 update raised concerns about 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's "take-it-or-leave-it" approach imposed unfair conditions, undermining user autonomy and violating the Competition Act, 2002.As part of its directives, the CCI prohibited WhatsApp from sharing user data with Meta or its affiliates for five years. WhatsApp was also instructed to specify the purposes of data sharing in its privacy policy and link each type of data to its specific use. Additionally, the CCI mandated that WhatsApp should not make data sharing a condition for users to access its services in India, with data sharing for advertising purposes being particularly restricted.This led to the appeal before NCLAT. .During the hearing on January 16, Senior Advocates Kapil Sibal and Mukul Rohatgi, representing Meta and WhatsApp, had argued that the CCI had exceeded its jurisdiction by ruling on WhatsApp's privacy policy, as the matter was sub judice before a Constitution Bench of the Supreme Court. It was stated by Sibal that the issue had broad implications across multiple dimensions. The CCI was said to have interfered with the privacy policy of an entity despite the matter already being under review by a five-judge Bench of the Supreme Court. It was argued that the CCI lacked the jurisdiction to address it..Sibal further contended that the order was viewed as one that dismantled WhatsApp’s business model. It was pointed out that India's data privacy law, set to take effect in mid-2025, would ultimately govern the dispute, rendering the CCI's order irrelevant.Rohatgi emphasized that WhatsApp’s data-sharing practice being scrutinized was neither harmful nor suspicious but rather routine and benign. He argued that the 2021 policy update was merely a continuation of the 2016 policy. Rohatgi contended that the update had been specifically challenged before the Constitution Bench and no stay was granted by the Supreme Court..Advocate Samar Bansal, appearing for the CCI, argued that the investigation conducted by the CCI and the case in the Supreme Court did not overlap. He clarified that data privacy laws focus on personal data whereas competition laws address business-related data. It was further noted that Indian users lack the option to opt out of the policy unlike users in Europe..WhatsApp was represented by Advocate Tejas Karia from Shardul Amarchand Mangaldas. Internet Freedom Foundation (IFF) was represented by Advocates Abir Roy, Vivek Pandey and Biyanka Bhatia from Sarvada Legal.
