The National Company Law Appellate Tribunal (NCLAT) has set aside a part of the Competition Commission of India’s (CCI) order that prohibited WhatsApp from sharing user data with Meta platforms for advertising purposes for five years, while retaining the Rs 2.13 billion penalty imposed on the platform.
Modifying the CCI’s order dated November 18, 2024, the NCLAT dismissed the directions under paragraph 247.1 of the 158-page order. However, the two-member bench upheld the findings of breach under Sections 4(2)(a)(i) and 4(2)(c), noting that WhatsApp’s 2021 policy amounted to abuse of dominance and led to market denial.
The appellate tribunal observed in its 184-page ruling that the cross-platform data sharing arrangement between WhatsApp and Meta strengthened Meta’s position in the display advertising market, creating entry barriers for competing firms that lacked similar access to WhatsApp’s data.
However, the NCLAT stated that the CCI’s conclusion regarding breach of Section 4(2)(e) was not sustainable, as there was insufficient basis to determine that Meta leveraged dominance in the over-the-top (OTT) messaging market to extend dominance in online display advertising.
The tribunal said that the remaining portions of the original CCI order stand upheld, and that it found no fault in the methodology used by the CCI for calculating the penalty amount.
Further, it noted that while Meta may not be dominant in the online display advertising market in India, it remains a leading player, and its conduct has resulted in anti-competitive effects by restricting competition in this market. The NCLAT also confirmed that Meta continues to hold complete control over WhatsApp’s operations and business decisions.
Earlier, in September, the tribunal had reserved its order after hearing Meta and WhatsApp’s appeals challenging the CCI’s findings related to the 2021 WhatsApp privacy policy update. Both firms had contested the penalty of Rs 2.13 billion imposed for unfair business practices. The CCI had imposed this penalty in November last year in relation to WhatsApp’s privacy policy update. Meta and WhatsApp later approached the NCLAT, which in January granted an interim stay on the five-year data-sharing ban imposed by the CCI, providing temporary relief to the company.
