Context

• In the digital age, data has become a powerful tool for market dominance, leading to concerns over monopolistic practices by technology giants.
• The recent order by the Competition Commission of India (CCI) against Meta underscores the increasing scrutiny over data exploitation and anti-competitive behaviour in digital markets.
• Now it becomes imperative to explore the significance of the CCI’s decision, its broader implications in the global regulatory landscape, and the need for India to update its competition laws to address data-driven monopolies effectively.

An Overview of The CCI’s Order Against Meta

• On November 18, 2024, the CCI imposed a fine of ₹213.14 crore on Meta and introduced a five-year ban on sharing WhatsApp user data with other Meta-owned platforms such as Facebook and Instagram for advertising purposes.
• The order was based on the finding that WhatsApp’s 2021 privacy policy update constituted an abuse of its dominant position in the markets for Over-The-Top (OTT) messaging services and online display advertising.
• The policy mandated users to consent to data-sharing on a “take-it-or-leave-it” basis, reinforcing Meta’s market power and limiting competition.
• Meta appealed the decision to the National Company Law Appellate Tribunal (NCLAT), which granted a stay on the ban and the penalty on January 23, 2025, provided Meta deposited 50% of the penalty.
• This legal battle highlights the growing challenge of regulating tech giants that leverage data to consolidate their market dominance.

The Role of Data in Digital Market Dominance

• Data has become the backbone of the modern digital economy, often likened to oil but with an even greater utility.
• Unlike finite resources, data can be collected, analysed, and reused indefinitely, providing immense competitive advantages.
• Meta, for instance, leverages its vast user data to refine algorithms, enable hyper-targeted advertising, and create personalized experiences.
• This data-driven dominance fosters network effects, where more users generate more data, further strengthening a platform’s market position and deterring new competitors.
• Google’s case in India further illustrates this trend. In 2022, the CCI fined Google ₹1,337.76 crore for abusing its dominance in multiple markets, including mobile operating systems and app stores.
• Google was penalised for mandating the pre-installation of its apps on Android devices, a practice that was upheld by the NCLAT in 2023.
• These cases highlight how dominant players use their control over digital infrastructure to entrench their positions, making regulatory intervention crucial.

Global Regulatory Efforts to Curb Tech Monopolies

• United States: Antitrust Investigations and Lawsuits
  • Meta (Facebook, Instagram, and WhatsApp)
    • In 2020, the U.S. Federal Trade Commission (FTC) filed an antitrust lawsuit against Meta, accusing it of engaging in anti-competitive practices by acquiring Instagram (2012) and WhatsApp (2014) to eliminate competition.
    • The lawsuit argues that Meta’s acquisitions were not aimed at enhancing its services but rather at stifling emerging competitors in the social media and messaging markets.
    • The FTC has sought a breakup of Meta’s business to restore competitive conditions.
  • Google's Legal Challenges
    • In 2024, the U.S. District Court for the District of Columbia found Google guilty of violating the Sherman Act, the key U.S. antitrust law, due to its exclusive agreements in the search and online advertising markets.
    • Google has been sued for monopolising the digital advertising market by acquiring competitors, forcing advertisers to use its ad services, and limiting the interoperability of rival advertising platforms.
    • U.S. government has sought structural remedies, including breaking up parts of Google’s ad business to restore fair competition.
  • These legal actions represent a shift in the U.S. regulatory stance, which for years had been lenient toward digital monopolies.
  • With bipartisan support, there is a growing push for stricter oversight and legislative reforms to update antitrust laws for the digital age.
• European Union: A Pioneering Approach to Digital Regulation
  • Digital Markets Act (DMA) and General Data Protection Regulation (GDPR)
    • The Digital Markets Act (DMA), which came into effect in 2023, identifies ‘gatekeepers’, large digital platforms like Meta, Google, and Amazon, that must comply with specific rules to prevent anti-competitive behaviour.
    • The General Data Protection Regulation (GDPR), introduced in 2018, has set a global precedent for data protection by enforcing strict consent requirements and penalising unauthorised data usage.
    • The DMA mandates interoperability between messaging apps, prohibits self-preferencing (such as Google favouring its own search results over competitors), and requires companies to provide users with more control over their data.
  • Meta’s Facebook-Germany Case
    • In 2019, Germany’s Bundeskartellamt (Federal Cartel Office) found Meta guilty of abusing its dominant position by combining user data from various platforms (Facebook, Instagram, and WhatsApp) without explicit user consent.
    • The decision forced Meta to allow users to opt out of data merging across its platforms, setting a precedent for regulating data monopolization as an anti-competitive practice.
  • Google’s €8 Billion Antitrust Penalties
    • Over the past decade, Google has faced multiple fines in the EU for anti-competitive practices, totalling over €8 billion.
    • The European Commission imposed three major fines on Google.
    • €2.42 billion (2017) for manipulating search results to favour its shopping service.
    • €4.34 billion (2018) for forcing smartphone manufacturers to pre-install Google apps on Android devices.
    • €1.49 billion (2019) for anti-competitive advertising practices in online search advertising.
  • The EU’s approach to regulating digital monopolies is considered one of the most comprehensive in the world, balancing consumer protection, data privacy, and market competition.

The Way Ahead for India: Need for Reform in India’s Competition Law

• Despite CCI’s proactive stance, India’s current competition law—the Competition Act, 2002, lacks explicit provisions to tackle data-centric monopolies.
• Traditional antitrust frameworks focus primarily on price-based dominance, whereas digital markets function on the principles of data aggregation and network effects.
• Therefore, legal reforms must introduce ‘data monopolization’ as a key parameter for assessing market dominance.
• This would require redefining terms such as ‘market power’ and “dominant position” to align with the realities of digital competition.
• One potential solution could be mandating interoperability and data-sharing agreements to prevent monopolistic control over user information.
• Additionally, India could benefit from integrating its competition law with the Digital Personal Data Protection Act, 2023, to ensure a coordinated approach between data protection and market regulation.
• Drawing inspiration from the EU’s combination of the DMA and GDPR, India could create a more holistic framework to tackle the challenges of data exploitation and anti-competitive practices.

Conclusion

• The CCI’s action against Meta is a significant step in regulating the digital economy, but it also underscores the urgent need for legal reforms.
• As data-driven monopolies continue to shape market dynamics, India must modernise its competition laws to effectively address these emerging challenges.
• By learning from global regulatory efforts and implementing forward-looking policies, India can develop a competitive and fair digital marketplace while ensuring consumer privacy and innovation.
• The Meta case is not just a legal battle; it is a pivotal moment in the broader discourse on digital market regulation, shaping the future of India’s digital economy.