Why in news?

WhatsApp plans to appeal the Competition Commission of India’s (CCI) ruling imposing a $25.4 million fine for anti-competitive practices related to its 2021 privacy policy.

The policy, requiring user data sharing with Meta-owned apps for advertising, sparked concerns over competition and privacy, with allegations that WhatsApp exploited its dominant position to enforce the terms.

What’s in today’s article?

• Competition Commission of India (CCI)
• WhatsApp’s 2021 privacy policy
• WhatsApp-CCI dispute

Competition Commission of India (CCI)

• About
  • It is a statutory body established in March 2009 under the Competition Act, 2002.
• Objectives:
  • Eliminate practices having adverse effect on competition
  • Promote and sustain competition
  • Protect the interests of consumers
  • Ensure freedom of trade in the markets of India
• Members: It consists of one Chairperson and six members who shall be appointed by the Central Government.
• Functions of CCI
  • The commission is a quasi-judicial body who also gives opinions to statutory authorities.
  • It is also mandated to undertake competition advocacy, create public awareness and impart training on competition issues.
  • In order to fulfil its objectives, the commission may:
    • conduct an enquiry into certain kinds of agreements and dominant position of enterprise,
    • determine whether an agreement has AAEC (appreciable adverse effects on competition).

WhatsApp’s 2021 privacy policy

• About
  • In January 2021 WhatsApp rolled out a new privacy policy and had given users time till 28 February 2021 to accept and update.
  • The 2021 update introduced significant changes, particularly in sharing user data between WhatsApp and Meta’s platforms like Facebook and Instagram.
  • It allowed the sharing of user data, including phone numbers, contacts, and transaction details, for advertising and business-related purposes.
  • 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.
• Concerns raised
• WhatsApp's 2021 privacy policy sparked global controversy, particularly in India, over concerns about undue control over user data and limited consumer choice, with non-compliance risking app access loss.
• While WhatsApp claimed the update aimed to enhance business-user communication, critics feared it would commercialize personal data.
• The absence of comprehensive data protection laws in India heightened the backlash, prompting legal scrutiny and the CCI investigation.
• Have other countries raised objections?
  • 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.

WhatsApp-CCI dispute

• About
  • The WhatsApp-CCI dispute involves an investigation into WhatsApp's 2021 privacy policy, which mandated user data sharing with Meta, raising concerns about anti-competitive practices and data privacy violations.
• 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
  • 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 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. The Delhi High Court dismissed the petitions, allowing the CCI to proceed.
  • August, 2022: A division bench of the Delhi High Court upheld the single judge’s decision, reaffirming the CCI’s authority.
  • October 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.