GUWAHATI: The Competition Commission of India (CCI) has imposed a monetary penalty of ₹213.14 crore on Meta for abusing its dominant position regarding WhatsApp’s 2021 Privacy Policy update. The penalty was announced on Monday, November 18, 2024, and relates to how WhatsApp collected and shared user data with other Meta companies. The CCI also issued cease-and-desist orders and directed Meta and WhatsApp to implement specific behavioural remedies within a defined timeline.
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The CCI identified two relevant markets in this matter: the market for Over-The-Top (OTT) messaging apps through smartphones in India and the market for online display advertising in India. Furthermore, it was also found that Meta, operating through WhatsApp, holds a dominant position in the OTT messaging app market and also leads the online display advertising market.
The issue stemmed from an update in WhatsApp’s terms of service and privacy policy, which was notified to users starting from January 2021. The update, which took effect on February 8, 2021, mandated users to accept the new terms, including expanded data collection and sharing with Meta companies, in order to continue using WhatsApp. This update removed the previous option to opt out of data sharing with Facebook, making data sharing mandatory for all users.
The CCI determined that the 2021 policy update, which was imposed on a 'take-it-or-leave-it' basis, constitutes an unfair condition under the Competition Act. This practice, which forces users to accept expanded data sharing with Meta companies, undermines user autonomy and constitutes an abuse of Meta's dominant position.
The CCI further found that Meta’s data-sharing practices created barriers for competitors in the display advertising market and leveraged its dominance in OTT messaging apps to protect its position in the advertising market, violating multiple sections of the Competition Act.
To address these anti-competitive practices, the CCI has issued the following directives:
1. WhatsApp must not share user data collected on its platform with other Meta companies for advertising purposes for five years from the date of the order. After this period, the same restrictions will apply to data sharing for advertising purposes.
2. WhatsApp must provide a detailed explanation of the data shared with Meta companies, specifying the purpose for each type of data shared.
3. WhatsApp users in India, including those who accepted the 2021 update, must be given the option to manage data sharing through an opt-out feature and be able to review and modify their choices through a prominent tab in settings of WhatsApp application.
4. Any future policy updates must comply with these requirements.