WhatsApp-CCI fracas explained: Why Meta is appealing against a $25.4m fine

The Competition Commission of India has accused Meta-owned WhatsApp of abusing its dominant market position in its 2021 privacy update. Here's all you need to know

WhatsApp has announced plans to appeal the Competition Commission of India’s (CCI) recent ruling, which imposed a $25.4 million (approximately Rs 213.14 crore) fine over anti-competitive practices linked to its 2021 privacy policy update. The policy, which required the sharing of user data with other Meta-owned apps for advertising, raised concerns regarding market competition and privacy.

 

The ongoing investigation stems from complaints that WhatsApp leveraged its dominant market position to enforce the policy, leaving users with no choice but to accept the terms.

 

What is the WhatsApp-CCI dispute?

The WhatsApp-CCI dispute refers to the ongoing investigation by the CCI into WhatsApp's 2021 privacy policy update, which involves sharing user data with its parent company, Meta.

 

 

This policy raised concerns about potential anti-competitive practices and data privacy violations.  Also Read: WhatsApp parent firm Meta disagrees with CCI decision, plans to appeal

 

What was WhatsApp’s 2021 privacy policy update?

The 2021 update introduced significant changes, particularly in sharing user data between WhatsApp and Meta’s platforms like Facebook and Instagram.

 

The update allowed the sharing of user data, including phone numbers, contacts, and transaction details, for advertising and business-related purposes.

 

How has WhatsApp defended the policy?

WhatsApp claims the update was necessary to improve business features. It assures users that private messages remain encrypted and secure.

 

The policy primarily concerns data shared with businesses and third-party apps for targeted ads and customer service integration.

 

What concerns has the policy raised?

The policy stirred controversy in India and globally, with authorities concerned it gave WhatsApp undue control over user data and limited consumer choice. Users who didn’t accept the terms faced the risk of losing access to the app’s services.

 

WhatsApp argued that the update would improve business-user communication, but many feared it would lead to the commercialisation of personal data.

 

In India, the backlash was intensified by the absence of comprehensive data protection laws, leading to legal scrutiny, including the CCI’s investigation.

 

Have other countries raised objections?

Yes, WhatsApp has faced global legal challenges over its 2021 privacy policy.

 

European Union: In September 2021, Ireland’s data regulator fined WhatsApp GBP 225 million for failing to meet transparency requirements under the General Data Protection Regulation (GDPR). WhatsApp has appealed the decision. 

What is CCI's probe against WhatsApp?

The CCI initiated its probe in 2021 to assess whether the policy harmed competition by unfairly exploiting user data.

 

The CCI has now fined Meta $25.4 million and directed WhatsApp to stop sharing user data with Meta-owned apps for advertising purposes for the next five years.

 

This investigation is crucial in India, where data protection laws are still evolving. It has also sparked broader discussions about data privacy and competition law.

 

Timeline of WhatsApp-CCI dispute

Here’s a chronological overview of key events in the CCI’s investigation:

 

January 2021: WhatsApp announced an update to its privacy policy, mandating users to accept terms that included sharing data with Facebook and its subsidiaries.

  March 24, 2021: The CCI launched a suo moto investigation into the update, citing concerns over potential abuse of dominance and anti-competitive practices.

  April 2021: WhatsApp and Meta challenged the CCI’s jurisdiction in the Delhi High Court.

  April 22, 2021: The Delhi High Court dismissed the petitions, allowing the CCI to proceed.

  August 25, 2022: A division bench of the Delhi High Court upheld the single judge’s decision, reaffirming the CCI’s authority.

  October 14, 2022: The Supreme Court dismissed appeals by WhatsApp and Meta, permitting the investigation to continue.

  November 18, 2024: The CCI fined Meta $25.4 million and ordered WhatsApp to stop sharing user data with other Meta-owned apps for advertising purposes for five years.

  November 19, 2024: Meta announced its intention to appeal the CCI’s decision.