Meta questions CCI’s 5-year data-sharing ban before NCLAT, terms it arbitrary

New Delhi: Meta on Tuesday told the National Company Law Appellate Tribunal (NCLAT) that the Competition Commission of India (CCI) had provided no rationale for imposing a five-year ban on data sharing between Meta and WhatsApp for advertising purposes.

Senior Advocate Amit Sibal, appearing for Meta, described the order as based on a “flawed approach” and listed what he called “seven misses” by the regulator in its findings.

Sibal said the five-year restriction was “entirely unexplained” in a dynamic, fast-moving industry. He argued that proceedings against Meta and WhatsApp were initiated “on the basis of misinformation” in 2021, including the claim that WhatsApp’s updated privacy policy would break end-to-end encryption and give Meta access to user chat content.

He maintained that the 2021 update did not affect the privacy of personal messages.

“The CCI failed to contact a single user or advertiser to assess the impact of the 2021 Update, still declaring the update to be coercive. There is also no evidence of any competitors being harmed or foreclosed as a result of the limited data sharing from WhatsApp to Meta on account of the 2021 Update,” Sibal said.

He further submitted that the findings were based on “speculative conduct and hypothetical scenarios.” On denial of market access, he said the CCI erred in asserting that there was no need to establish dominance in the affected market, calling it contrary to precedent.

On the issue of leveraging, Sibal said there was no evidence that limited data sharing caused foreclosure or harm. “In fact, the evidence on record shows intense competition, new entrants and thriving incumbents like Snapchat, Google, Amazon, Affle, Twitter (now X),” he added.

Senior Advocate Arun Kathpalia, representing WhatsApp, argued that under competition law, remedies must be proportionate and necessary. In this case, he said, the restrictions imposed were arbitrary.

The submissions came as Meta and WhatsApp concluded their arguments before the NCLAT, which is hearing their appeal against a CCI order that imposed a penalty of Rs 213.14 crore in November 2024 for alleged unfair business practices linked to WhatsApp’s 2021 privacy policy update.

In addition to the fine, the CCI had barred data sharing between WhatsApp and Meta for advertising for five years. The NCLAT stayed this ban in January 2025, offering temporary relief to Meta.

The CCI is scheduled to begin its arguments before the tribunal on September 18 and 19.