The National Company Law Appellate Tribunal (NCLAT) today upheld the part of the Competition Commission of India (CCI) order that said that WhatsApp users have an option to opt out of data sharing under the messaging platform's 2021 privacy policy..A coram of Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka said,“We are of the prima facie view that the ban of five years imposed in paragraph 247.1 need to be stayed. We, however, are of the view that the directions issued by the CCI under paragraph 247.2 and 247.3 need not be stayed and they need to be complied with. The only limited interim order which we are inclined to grant is to stay the direction in paragraph 247.1 by which five years’ ban has been imposed. The direction in paragraph 247.1 are stayed.”.Paragraphs 247.2 and 247.3 of the CCI order dealt with a series of directions to Meta and WhatsApp including:1) WhatsApp must provide a clear explanation of what user data is shared with other Meta entities, specifying the purpose and linking each data type to its purpose.2) Data sharing for purposes beyond WhatsApp services cannot be a condition for accessing WhatsApp in India.Furthermore, users must have:a) An opt-out option for such data sharing, accessible via an in-app notification.b) A way to review and modify their choice through a prominent tab in WhatsApp settings.c) Future policy updates must comply with these requirements. .Earlier today, the NCLAT stayed the part of the CCI order which had directed WhatsApp not to share data collected on its platforms with Meta or its products for five years. The appellate tribunal further stayed the penalty of ₹213.14 crore subject to WhatsApp/Meta depositing 50 per cent of the amount..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 behavioural remedies within a specified timeline.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 pending before a Constitution Bench of the Supreme Court.Sibal had stated that the issue had broad implications across multiple dimensions. The CCI interfered with the privacy policy of an entity despite the matter already being under review by a five-judge Bench of the Supreme Court, he said..The NCLAT in its interim order affirmed that the antitrust regulator had the jurisdiction to investigate into WhatsApp’s 2021 policy despite the same issue being pending in the Supreme Court. Referring to an order passed by the Supreme Court in October 2022 permitting CCI to carry on its investigation, NCLAT said, “The above order clearly supports the submissions of the CCI that suo moto proceeding initiated by the CCI was not to be interfered with. However, the Hon’ble Supreme Court has observed that the proceedings shall be decided and disposed of in accordance with law and on its own merits. The initiation of proceeding was thus, not interfered but the ultimate order passed by the Commission has to be tested on its own merits.”.WhatsApp had also argued that CCI’s order is likely to be subsumed by the Digital Personal Data Protection Act, 2023 which is expected to come into force soon. The NCLAT acknowledged this and granted leave to both the parties to seek modifications to the interim order once the new legislation is implemented.The case will now come up for hearing on March 17 for final hearing. .WhatsApp was represented by Senior Advocates Mukul Rohtagi and Arun Kathpalia with Advocates Yaman Verma, Shashank Mishra, Raveena Lalit, Aisha Khan, Shivek Endlaw, Parv Kaushik, Anandita Tayal, Bani Brar, Diksha Gupta, Devanshi Singh, Udit Dedhiya, Aditya Dhupar and Tahira Kathpalia.Meta was represented by Senior Advocate Kapil Sibal with Advocates Tejas Karia, Naval Chopra, Supritha Prodaturi, Akshi Rastogi, Parinita Kare, Aatmik Jain, Ritika Bansal and Aparajita Jamwal..CCI was represented by Advocates Samar Bansal, Manu Chaturvedi, Vedant Kapur and Kaustubh Chaturvedi.Internet Freedom Foundation was represented by Advocates Abir Roy, Vivek Pandey, Aman Shankar and Biyanka Bhatia. .[Read order]
