WhatsApp’s Updated Privacy Policy Mandating Data Sharing for Non-Service Purposes Violates Section 4

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  • Last Updated on 9 December, 2024

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WhatsApp's Data-Sharing Policy

Case Details: Updated Terms of Service and Privacy Policy for WhatsApp Users, In re - [2024] 168 taxmann.com 482 (CCI)

Judiciary and Counsel Details

  • Ms Ravneet Kaur, Chairperson, Anil Agrawal & Deepak Anurag, Member
  • Arun Kathpalia, Sr. Adv., Yaman Verma, Ms Aisha Khan, Aniket Ghosh, Ms Parinita Kare, Ms Bani Brar, Ms Tahira Kathpalia and Ms Supritha Prodaturi, Advs. RajShekhar Rao, Sr. Adv. Naval Chopra, Ms Krithika Ramesh, Ms Meherunnisa A. Jaitley, Rajarshi Roy, Ms Nitika Dwivedi, Advs., Ms Ruth Chen & Rahul Satyan, Representatives of Meta.
  • Tejas Karia, Aatmik Jain, Aakash Kumbhat, Shashank Mishra, Advs. Vivek Pandey, Sasthibrata Panda, Ms Shreya Kapoor & Ms Biyanka Bhatia, Advs. for all Appearing Parties.

Facts of the Case

In the instant case, WhatsApp had updated its privacy policy and terms of service for WhatsApp users. It was inter alia reported that the new policy made it mandatory for users to accept terms and conditions in order to retain their WhatsApp account information and provided as to how it would share personalised user information with Facebook (later renamed as Meta) and its subsidiaries.

The Commission, decided to take suo-motu cognisance of the matter. It was noted that WhatsApp was dominant in the relevant market for Over The Top (OTT) messaging apps through smartphones in India. Further, users were made to accept the 2021 Update, which mandated the sharing of data for purposes other than providing WhatsApp services, without offering any choice to opt out of the same. This imposition disregards the legitimate expectations of users to decide how their data will be collected and used.

CCI Held

The CCI observed that by compelling all users to accept data-sharing conditions, WhatsApp reduces the level of privacy (an important non-price parameter of competition in digital markets) that users expect, thus diminishing consumer welfare. This would result in increasing entry barriers for rivals and thus potentially lead to their exclusion from the market.

The CCI held that the impugned conduct of data-sharing by WhatsApp with Facebook apparently amounted to the degradation of non-price parameters of competition, ultimately constituting an abuse of market power.

Further, the CCI held that WhatsApp had prima facie contravened the provisions of section 4 of the Competition Act, 2002, through its exploitative and exclusionary conduct in the garb of the policy update. Accordingly, in terms of provisions of Section 27(a) of the Act, WhatsApp was directed to cease and desist from indulging in such practices, which had been found to violate the provisions of the Act.

List of Cases Referred to

  • Legislation expressly or impliedly provides for retrospective application (In Zile Singh v. State of Haryana (2004) 8 SCC 1 (para 250)
  • Videocon International Limited v. SEBI (2015) 4 SCC 33 (para 250).

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