The National Company Law Appellate Tribunal (NCLAT) has granted partial relief to Meta Platforms and its messaging arm WhatsApp in the ongoing case linked to WhatsApp’s 2021 privacy policy update.
While the tribunal upheld the Rs 213.14 crore penalty imposed by the Competition Commission of India (CCI), it overturned two key elements of the regulator’s earlier ruling — the finding that WhatsApp held a dominant market position and the five-year ban on user data sharing for advertising purposes, IANS reported.
Background: CCI found WhatsApp abused market position
The matter goes way back to November 2024 when the CCI came to the conclusion that WhatsApp had indeed exercised its power in India’s OTT (Over-The-Top) messaging market unreasonably.
The CCI stated that WhatsApp did not give users any choice and simply made it mandatory for the users to accept its 2021 update, which included data sharing with other Meta companies, thereby taking away the earlier option of opting out. The commission maintained that this action was a way of making competition less forceful in the online advertising ecosystem.
However, the NCLAT bench — led by Justice Ashok Bhushan and Technical Member Arun Baroka — struck down these provisions, ruling that the CCI had exceeded its authority under Section 4(2)(e) of the Competition Act.
The tribunal pointed out that the issues of data protection and privacy are not within the regulatory powers of the CCI. It concurred with the reasoning put forward by Meta that an absolute prohibition on data exchange might jeopardise the free model of WhatsApp which depends on the use of Meta’s platforms in an integrated manner.
Consequently, the NCLAT annulled the prohibition contained in paragraph 247.1 of the CCI’s directive, arguing that such restrictions were outside the control of the competition regulator.
Meta welcomes Tribunal’s decision
A Meta spokesperson welcomed the ruling, saying, “We welcome the NCLAT’s decision. While we evaluate the written order, we continue to reiterate that WhatsApp’s 2021 privacy policy update did not change the privacy of people’s personal messages which remain end-to-end encrypted.”
The spokesperson added that WhatsApp’s optional business features — including bill payments, ticket booking, and shopping — help make users’ lives easier while supporting local businesses and contributing to India’s digital economy.
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