Judgment on WhatsApp's Data Sharing Practices
The National Company Law Appellate Tribunal (NCLAT) has partly upheld the Competition Commission of India’s (CCI) findings regarding WhatsApp's practices. Here are the key details:
Abuse of Dominant Position
- NCLAT confirmed that WhatsApp abused its dominant position by forcing users to accept its 2021 data sharing policy without providing an opt-out option.
- The mandatory acceptance of vague data sharing terms was ruled as coercive and unfair, violating competition law.
Data Sharing and Market Impact
- The tribunal noted that cross-platform data sharing between WhatsApp and Meta (owner of WhatsApp) gave Meta a competitive advantage in the digital advertising market.
- This practice created entry barriers for other firms in the digital advertising segment.
- WhatsApp’s full control by Meta leads to special circumstances of abuse of dominant position, but it was not concluded that Meta leveraged its dominance in messaging to extend dominance in online advertising.
Penalties and Remedies
- NCLAT upheld a penalty of ₹213 crore imposed by CCI on WhatsApp for its conduct.
- WhatsApp was directed to explain details of user data shared with group companies, specifying the purpose for which each type of data is shared, especially when not used for advertising.
