In a significant blow to WhatsApp and its parent entity Meta, the Competition Commission of India on Monday imposed a penalty of ₹213.14 crore (about USD 25.3 million) on Meta for abusing its dominant position through the 2021 update to WhatsApp’s privacy policy and thus violating the Competition Act. The CCI has instructed WhatsApp to not share the user data with other Meta companies (such as Instagram and Facebook) and products for advertising purposes for five years.
The CCI has also forbidden WhatsApp from making user data sharing with Meta companies a precondition for accessing WhatsApp services in India.
For data shared with Meta companies and products for purposes other than advertising, WhatsApp’s policy must specify what kind of data is shared and why. When WhatsApp user data is shared for any purpose other than providing WhatsApp services, the users must be given the choice to opt out of such data sharing, and modify their choice in–app. This option must be made available to all users, including those who accepted the 2021 update.
Through its investigation, the CCI concluded that WhatsApp is the dominant player in the market for OTT (over-the-top) messaging apps through smartphones in India, and Meta holds a “leading position” in the online display advertising market in India.
In a press statement, the CCI said that WhatsApp’s 2021 policy update, that made it mandatory for users to accept the new terms – which included data sharing with Meta – and removed the earlier option to opt-out, was an “unfair condition” under the Competition Act. It said that the update compelled all users “to accept expanded data collection terms and sharing of data within Meta Group without any opt out”. It said that because of network effect and lack of effective alternatives, the policy update forced users to comply, undermined their autonomy and meant that Meta had abused its dominant position.
The CCI also said that by sharing WhatsApp users’ data between Meta companies for purposes other than providing WhatsApp services created an entry barrier for Meta’s rivals, and resulted in the denial of market access in the display advertisement market.
WhatsApp’s 2021 privacy policy update had come under fire across the world for antitrust concerns, and for undermining users’ privacy. A Brazilian court, in August 2024, had prohibited WhatsApp from sharing data with Facebook and Instagram in the country.
A Meta spokesperson said that they plan to appeal against the CCI’s decision.
“We disagree with the CCI’s decision and plan to appeal. As a reminder, the 2021 update did not change the privacy of people’s personal messages and was offered as a choice for users at the time. We also ensured no one would have their accounts deleted or lose functionality of the WhatsApp service because of this update,” the spokesperson said.
CCI had opened an investigation into WhatsApp’s January 2021 update in March 2021. Meta (then Facebook) and WhatsApp had approached the Delhi high court to get this investigation stopped, on the grounds that the policy update had been challenged both in Delhi HC and in the Supreme Court. These challenges, however, were privacy-related petitions.
A single judge bench of Justice Navin Chawla had dismissed WhatsApp’s petition in April 2021. Meta (then Facebook) and WhatsApp had appealed the judgement but the appeal was also dismissed by a division bench of then Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad in August 2022.