On November 18, 2024, the Competition Commission of India (CCI) announced that it fined Meta Platforms, Inc. INR 2.13 billion (approx. $25.24 million) for violation of the Competition Act in relation to WhatsApp's 2021 privacy policy update. 

Background to the decision

The CCI noted that WhatsApp's 2021 privacy policy update stated that effective February 8, 2021, users were required to accept these terms, including the expanded scope of data collection as well as mandatory data sharing with Meta companies, to continue using WhatsApp. Under the previous privacy policy, WhatsApp users were given the option to opt-out.

Findings of the CCI

The CCI found that the 2021 privacy policy update on a 'takeit-or-leave-it' basis constituted an imposition of unfair conditions under the Competition Act, as it compelled all users to accept expanded data collection terms and sharing of data within Meta without any opt-out option. The CCI found that the update forced users to comply, undermining their autonomy, and constituted an abuse of Meta's dominant position, in violation of Section 4(2)(a)(i) of the Competition Act. Further, as regards to sharing of data between Meta companies, the CCI found that:

• sharing of WhatsApp users' data between Meta companies for purposes other than providing WhatsApp Service creates an entry barrier for the rivals of Meta and thus, results in denial of market access in the display advertisement market, in contravention of the provisions of Section 4(2)(c) of the Competition Act; and
• Meta engaged in leveraging its dominant position in the over-the-top (OTT) messaging apps through smartphones to protect its position in the online display advertising market, in contravention of Section 4(2)(e) of the Competition Act.

Outcomes

In light of the above, the CCI issued cease-and-desist directions and also directed Meta and WhatsApp to implement certain behavioral remedies within a defined timeline, including:

• WhatsApp will not share user data collected on its platform with other Meta companies or products for advertising purposes, for a period of five years from the date of receipt of this order. After the expiry of the said period, the directions below will also apply for data sharing for advertising purposes;
• with respect to sharing of WhatsApp user data for purposes other than advertising:
  • WhatsApp's policy should include a detailed explanation of the user data shared with other Meta companies or products. This explanation should specify the purpose of data sharing, linking each type of data to its corresponding purpose;
  • sharing of user data collected on WhatsApp with other Meta companies or products for purposes other than for providing WhatsApp services shall not be made a condition for users to access WhatsApp in India;
  • with respect to sharing of WhatsApp user data for purposes other than for providing WhatsApp services, all users in India (including users who have accepted the 2021 update) will be provided with the choice to manage such data sharing by way of an opt-out option prominently through an in-app notification and the option to review and modify their choice with respect to such sharing of data through a prominent tab in settings of WhatsApp application; and
  • all future policy updates shall also comply with these requirements.

You can read the press release here.