Meta Platforms Inc. (formerly Facebook) on Monday filed an appeal before the National Company Law Appellate Tribunal (NCLAT) challenging the ₹213.14 crore penalty imposed by the Competition Commission of India (CCI) for alleged anti-competitive practices linked to the controversial implementation of WhatsApp’s 2021 Privacy Policy.

The case has been listed for hearing on January 16, 2025, and will be presided over by a coram led by NCLAT Chairperson Justice Ashok Bhushan. 

Senior Advocates Kapil Sibal and Mukul Rohatgi, representing Meta and WhatsApp respectively, emphasised the industry-wide implications of the CCI order, urging Justice Bhushan to personally oversee the proceedings.

Background

On November 18, 2024, the CCI imposed a ₹213.14 crore penalty on Meta, finding the company guilty of abusing its dominant position in two relevant markets: OTT Messaging Apps: where WhatsApp is a dominant player in India; and Online Display Advertising: where Meta holds a leading position.

The penalty was accompanied by cease-and-desist directives and behavioural remedies to address anti-competitive practices. The controversy stemmed from WhatsApp’s 2021 Privacy Policy, which required users to accept expanded data-sharing terms with other Meta companies or risk losing access to the platform. This “take-it-or-leave-it” approach was found to violate Section 4(2)(a)(i) of the Competition Act, 2002, by imposing unfair conditions on users.

CCI Findings

The CCI found that requiring users to accept expanded data-sharing terms as a condition for using WhatsApp undermined their autonomy. Additionally, integrating WhatsApp data into Meta’s advertising ecosystem was seen as creating significant obstacles for competitors in the digital advertising market. Furthermore, Meta was found to have exploited WhatsApp’s market power to maintain and strengthen its dominance in online display advertising.

The CCI also highlighted the lack of transparency in the Privacy Policy, where users were not given meaningful choices about data usage.

Behavioural Remedies 

The CCI directed Meta and WhatsApp to prevent WhatsApp from sharing user data with Meta companies for advertising purposes for a period of five years. It also required them to enhance transparency by clearly explaining the type of data shared with Meta and linking it to specific purposes. Additionally, they were instructed to provide users with the option to opt out of non-service-related data sharing through in-app settings. Finally, the CCI mandated that all future policy updates comply with these transparency and opt-out requirements.

Meta’s Appeal

Meta’s appeal before NCLAT challenges the CCI order on the grounds of its implications for the digital ecosystem. Represented by Senior Advocates Kapil Sibal and Mukul Rohatgi, Meta contends that the CCI’s decision affects not only the company but the broader tech industry.

Broader Implications

The NCLAT’s decision is expected to set a precedent for balancing data privacy, competition, and user rights in India’s digital economy. This case underscores the increasing scrutiny on big tech firms globally, with regulators prioritizing transparency and fairness in the digital marketplace.