In November 2024, the CCI imposed a ₹213.14 crore penalty on Meta, finding that WhatsApp’s 2021 privacy policy update amounted to abuse of dominance.
Senior Advocate Amit Sibal, appearing for Meta today before the National Company Law Appellate Tribunal (NCLAT), argued that the Competition Commission of India (CCI) findings against WhatsApp’s 2021 privacy policy suffers from “seven major misses.”
The following are the 7 misses according to Sibal:
1. Action triggered by misinformation
Sibal said that the CCI’s action was based on public misinformation following the 2021 update.
“There was a canard that messages would no longer be end-to-end encrypted. The CCI swung into action on this misinformation, not facts,” he argued.
2. Misconception on data sharing
The second miss, according to him, was the claim that the 2021 update expanded WhatsApp’s ability to share data with Meta.
“It goes nowhere beyond the 2016 policy, which was upheld in 2017 and 2022. In fact, it offers users more clarity and transparency,” he submitted.
3. Misunderstanding of opt-out mechanism
Sibal described as “fundamental” the CCI’s misunderstanding that there was no opt-out.
“WhatsApp shares data with Meta for advertising purposes only in limited, optional scenarios. There is an opt-out.” he stressed.
4. Missing evidence on users and competitors
He said the CCI failed to contact even a single user or advertiser, and produced no evidence of rivals being harmed.
“No user was consulted, no competitor was shown to be foreclosed, yet the update was declared anti-competitive,” he contended.
5. Misapplication of law
According to Sibal, the Commission departed from its own precedents by asserting that there was no need to establish dominance in the relevant market.
“That is contrary to their own practice. The findings are based on speculative future scenarios rather than actual conduct.”
6. Misappreciation of pro-competitive effects
The sixth flaw, Sibal said, was the regulator’s failure to weigh the benefits of personalised advertising.
“CCI acknowledged users and advertisers benefit, yet ignored these pro-competitive effects, resulting in an incomplete and unbalanced assessment,” he submitted.
7. Remedies were a misadventure
Finally, Sibal termed the remedies a “misadventure.”
“The Commission failed to justify why sweeping measures in perpetuity are necessary or proportionate. Remedies must be both necessary and proportionate, and neither test is satisfied.”
In November 2024, the CCI imposed a ₹213.14 crore penalty on Meta, finding that WhatsApp’s 2021 privacy policy update amounted to abuse of dominance. The regulator concluded that the “take-it-or-leave-it” approach imposed unfair conditions on users, undermined autonomy and violated provisions of the Competition Act, 2002.
The CCI directed WhatsApp not to share user data with Meta or its affiliates for five years, and further required the platform to specify the purposes of every category of data collected and prohibit making data sharing a precondition for accessing its services in India.
WhatsApp and Meta challenged the order before the NCLAT. In January 2025, the NCLAT stayed both the penalty and the five-year data sharing ban, observing that such a ban could “lead to the collapse of the business model of WhatsApp LLC since the platform is free.” The penalty was stayed subject to WhatsApp/Meta depositing 50 per cent of the amount.
