Meta to appeal against CCI's Rs 213 crore penalty, diktat on data share

On Monday, CCI imposed a penalty of Rs 213.14 crore on Meta for abusing its dominant position

Menlo Park (California)-headquartered Meta Platforms on Tuesday opposed the Rs 213-crore penalty imposed by the Competition Commission of India (CCI) along with a cease-and-desist directive that clamped down on data-sharing. Meta said it would appeal against the move.

 

Late on Monday, India’s antitrust body had announced the penalty on Meta for allegedly abusing its dominant position. The case relates to how WhatsApp's 2021 Privacy Policy was implemented and how user data was collected and shared with other Meta companies. Meta  operates Facebook, WhatsApp, Instagram and Threads, among other services.

 

"We disagree with the CCI 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,’’ said a Meta spokesperson in a statement on Tuesday. ‘’We also ensured no one would have their accounts deleted or lose functionality of the WhatsApp service because of this update," the statement added.

 

 

In its order on Monday, the CCI had issued cease-and-desist directions, asking Meta and WhatsApp to implement certain behavioural remedies within a defined timeline. For instance, it has asked WhatsApp to stop sharing user data with Meta companies for advertising purposes for five years.

 

This is the second instance of the CCI taking a stringent stand on Big Tech. While legal experts and advocacy groups are lauding the effort, there’s a growing need for data governance laws.

 

“The recent order has brought the discourse on the intersection of data governance and competition frameworks back to the forefront. The CCI believes that data sharing between Facebook and WhatsApp amounts to degradation of a non-price parameter of competition for users, and, therefore, falls squarely within the domain of competition law. The Delhi High Court and the Supreme Court had also affirmed this view on the issue,” said Saksham Malik, senior programme manager, The Dialogue, a tech policy think tank.

 

Malik added that the proposed Digital Competition Bill, if and when it becomes a law, will most likely regulate Meta and its group companies.

 

For WhatsApp, the CCI order is a huge blow. India is its largest market with around 500 million users, India has also been an important market for business messaging. According to Sandhya Devanathan, head of Meta India, WhatsApp business revenue has doubled in a year.

 

Salman Waris, partner at TechLegis Advocates and Solicitors, called the CCI verdict significant. Possibly, this is the first time that a competition regulator outside of the EU, has fined Meta for changing the WhatsApp privacy policy and exploiting its dominant position violating users’ rights, Waris said. Being a dominant player in the instant communication/social media space, this ruling does have a significant impact, he added.

 

According to Meta, the update was about introducing optional business features on WhatsApp. It provided further transparency about how they collect and use data, the company said.

 

"We are committed to finding a path forward that allows us to continue providing the experiences that people and businesses have come to expect from us," said the Meta spokesperson.

 

In 2021, when WhatsApp policy update was announced, Indian users had raised concerns over the blanket acceptance of the new changes. There were media reports suggesting that many users had moved to platforms such as Signal and Telegram. This eventually made the company come out with full page advertisements to dispel rumours that their data was being shared with businesses on Facebook.

 

CCI had started an investigation in March 2021 after the company revised its policy.

 

Legal experts said the order was coming three years too late. The data sets collected and utilised over the last three years shall always remain with the company, they believe. “The existing data for sure would be used in future as well to train Meta AI tools and when you club this fact with the 500 million user base in India, the ramifications are exponential,” said a source.