The Competition Commission of India (“CCI”), India’s antitrust watchdog cracked down on Meta Platforms, Inc. (“Meta”) in its latest order dated November 18, 2024, stating that its subsidiary WhatsApp’s controversial 2021 update of its privacy policy constitutes abuse of its dominant position in the market and imposing a penalty of INR 213 crore on the company.
WhatsApp, an instant messaging and Voice-Over-IP app, owned completely by the technology conglomerate Meta has its biggest user base, with 500+ million users, in India. In 2021, WhatsApp updated its privacy policy, greatly expanding the scope of data collected, as well as the parties with whom such data would be shared.
While this update was released worldwide, users in Europe had the option to opt-out due to the data protection mandates that extend across the European Union by virtue of the General Data Protection Regulation (GDPR). On the other hand, this update was to be compulsorily accepted by users when launched in India.
The CCI, in its order, laid down that due to its immense user base, high market share, high number of daily and monthly downloads, and vertical integration with Meta WhatsApp was to be considered as a dominant player in the Over-The-Top (OTT) Messaging market. By forcing the user’s hand into sharing data with other Meta platforms without providing for an opt-out mechanism, the platform was putting forward exploitative terms that users were coerced into accepting due to WhatsApp’s dominant market position.
Further, CCI noted that by collecting user data and sharing it across Meta’s subsidiary family of platforms for purposes other than providing instant messaging services, WhatsApp’s raison d’etre, the platform was subverting user’s legitimate expectations with respect to how their data would be collected and shared.
Interestingly, CCI also found WhatsApp guilty of abuse of its dominant market position by denying access to the online advertising market. Though CCI did not find Meta to hold a dominant position in the online advertising market, it did state that by controlling the OTT Messaging market and with the effect of the new privacy policy, Meta could aggregate user data extensively leading to better user profiling, allowing it to target users with ads more effectively. This would lead to advertisers becoming dependent on Meta’s databank, thus denying access to other online advertisers.
“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,” a Meta spokesperson said in a statement.