A significant ruling delivered by an Indian tribunal on Thursday has lifted restrictions previously imposed on WhatsApp regarding its data sharing with Meta, its parent company. This decision marks a considerable triumph for Mark Zuckerberg’s social media conglomerate in its biggest user market, India.
This verdict by the National Company Law Appellate Tribunal temporarily removes a ban that was in place for five years, initiated by India’s antitrust regulator. The regulator had previously accused WhatsApp of misusing its market supremacy through its 2021 privacy policy update.
India is a crucial market for both Meta and WhatsApp, with over 700 million individuals utilizing the messaging service monthly as per Sensor Tower’s data.
The controversy sparked when WhatsApp began mandating its users to agree to an expanded data sharing policy with Meta’s platforms or face losing access to the messaging service. This was deemed problematic by regulators since unlike European users, Indian users were not given an option to opt out of this data sharing.
In November, the Competition Commission of India (CCI) argued that WhatsApp’s mandatory privacy update was an exploitation of Meta’s market dominance, as it pushed users to consent to broader data collection without offering an opt-out alternative.
At that point, the CCI found Meta to be leading in two significant markets in India: smartphone-based messaging apps, often referred to as “over-the-top,” and online display advertising.
While putting the ban on hold, the tribunal instructed Meta to pay approximately $12.35 million — half of a larger penalty — within a fortnight. The court is set to review the case again on March 17.
The tribunal, under the leadership of Justice Ashok Bhushan, voiced concerns that the five-year ban could jeopardize WhatsApp’s business model, which offers the messaging service at no cost.
Meta’s legal team countered by suggesting that India’s impending digital privacy law, due to come into effect later this year, should be the guiding principle for such issues rather than competition laws.
“We appreciate the NCLAT’s decision to grant a partial stay on the CCI’s order. As we contemplate the next steps, our primary objective remains to find a solution that backs the millions of businesses relying on our platform for growth and innovation while continuing to offer the high-quality experiences that users anticipate from WhatsApp,” a representative from Meta commented.
