WhatsApp privacy policy: Meta challenges CCI penalty, says regulator defined market wrongly

New Delhi: Meta Platforms has hit out at the Competition Commission of India (CCI), telling the National Company Law Appellate Tribunal (NCLAT) on Monday that the regulator has “erroneously” defined the relevant market and failed to prove any conduct that blocked rivals’ access.

Senior Advocate Amit Sibal, appearing for Meta, said the entire case is based on assumptions.
“This falls woefully short of the legal standard in Section 4(2)(c), which requires that for a finding of infringement, the conduct in question must have occurred or presently occurring,” he told the tribunal.

Sibal argued that CCI has not shown any effect of WhatsApp’s 2021 privacy policy update on the online display advertising market.

“The CCI has not shown how the limited sharing of data from certain optional features with Meta (for instance, optional business features like Click-to-WhatsApp Ads) has led to any impact on rivals in the market for online display advertising,” he said.

He added that CCI never sought the views of advertisers on the substitutability of services. “As a result, the CCI erroneously defined an artificially narrow relevant market of ‘online display advertising’. This market does not include substitutable services such as online search advertising,” he noted.

Sibal also pointed out that offline advertising, which competes with online due to new technologies, was excluded. He said the CCI ignored testimony from rivals like Google and Amazon that suggested otherwise.

The tribunal was hearing Meta’s appeal against a Rs 213.14 crore penalty imposed by CCI for alleged unfair practices linked to WhatsApp’s 2021 privacy policy update. Sibal will continue arguments on Tuesday.

Senior Advocate Arun Kathpalia, representing WhatsApp, concluded his side of the case. WhatsApp has maintained that CCI has no jurisdiction on data safety issues and that its 2021 update did not change the 2016 policy.

CCI will make its submissions on September 18 and 19.

Earlier this year, NCLAT had stayed a five-year ban ordered by CCI on WhatsApp sharing user data with Meta for advertising. The regulator had also directed Meta and WhatsApp to follow behavioural remedies, including barring WhatsApp from making data-sharing a condition to access its services in India.

The appellate tribunal, in January this year, had stayed the five-year ban imposed by the competition watchdog CCI on data-sharing practices between WhatsApp and Meta for advertising purposes, offering a breather to the tech giant.

In November, the CCI imposed a penalty of Rs 213.14 crore on Meta for unfair business practices with respect to the WhatsApp privacy policy update done in 2021.

Meta Platforms and WhatsApp had challenged this order before the NCLAT, which is an appellate authority over the orders passed by the CCI.

In its 156-page order, the CCI had, on November 18, 2024, directed Meta to cease and desist from anti-competitive practices.

According to that CCI order, Meta and WhatsApp have also been asked to implement certain behavioural remedies within a defined timeline to address the anti-competition issues.

The regulator called for implementing various remedial measures, including barring WhatsApp from sharing data collected on its platform with other Meta companies or Meta company products for advertising purposes for five years.

Among other directions, CCI had said that sharing of user data collected on WhatsApp with other Meta companies or Meta company products for purposes other than for providing WhatsApp services shall not be made a condition for users to access WhatsApp services in India.