India’s antitrust watchdog has fined Meta, the parent company of WhatsApp, Rs 213.14 crore for “abusing” its dominant position in relation to the messaging platform’s controversial 2021 update to its privacy policy. The Competition Commission of India (CCI) said the penalty follows over how the privacy policy was implemented, and user data was collected and shared with other Meta companies.
CCI Slaps Rs 213 Crore Fine On Meta
Why In News
- India’s antitrust watchdog has fined Meta, the parent company of WhatsApp, Rs 213.14 crore for “abusing” its dominant position in relation to the messaging platform’s controversial 2021 update to its privacy policy. The Competition Commission of India (CCI) said the penalty follows over how the privacy policy was implemented, and user data was collected and shared with other Meta companies.
What Is The Penalty For
- The antitrust watchdog said Meta has abused its dominant position in the market, explaining that this fine relates to how WhatsApp’s 2021 privacy policy was implemented and how user data was collected and shared with other Meta companies.
- The commission specifically highlighted two markets where WhatsApp was abusing its dominant position — OTT messaging apps through smartphones in India, and online display advertising in India.
- According to the CCI order, “The 2021 policy update by WhatsApp on a ‘take it-or-leave-it’ basis constitutes an imposition of unfair conditions under the Act, as it compels all users to accept expanded data collection terms and sharing of data within Meta Group without any opt-out.”
What Is The Case
- The Competition Commission of India (CCI) said the penalty follows over how the privacy policy was implemented, and user data was collected and shared with other Meta companies.
- The Commission also issued cease-and-desist directions and directed Meta and WhatsApp to implement certain behavioural remedies within a defined timeline. As per the CCI’s order, WhatsApp will not be allowed to share user data collected on its platform with other Meta Companies for advertising purposes, for a period of five years.
- In January 2021, WhatsApp had notified users that it was updating its privacy policy – which was mandatory for them to accept – with an expanded scope of data collection and data sharing between Meta companies. While users in India could not opt-out of the updated policy, WhatsApp’s users in the European Union could due to the bloc’s strong data privacy laws.
- The CCI said it has concluded that the policy update on a “take-it-or-leave-it” basis “constitutes an imposition of unfair conditions” under the Competition Act.
- Regarding data sharing between Meta companies, the Commission said that sharing of WhatsApp users’ data between Meta companies for purposes other than providing the messaging service “creates an entry barrier for the rivals of Meta” and “results in denial of market access in the display advertisement market”.
- “Meta has engaged in leveraging its dominant position in the OTT (over the top) messaging apps through smartphones to protect its position in the online display advertising market,” in contravention of the Competition Act, the CCI said.
- The CCI also said that WhatsApp’s privacy policy should include a detailed explanation of the user data shared with other Meta Companies, which should specify the purpose of data sharing, linking each type of data to its corresponding purpose.
Meta’s Response
- Menlo Park (California)-headquartered Meta Platforms opposed the Rs 213-crore penalty imposed by the Competition Commission of India (CCI) along with a cease-and-desist directive that clamped down on data-sharing. Meta said it would appeal against the move. Meta operates Facebook, WhatsApp, Instagram and Threads, among other services.
- “We disagree with the CCI decision and plan to appeal. As a reminder, the 2021 update did not change the privacy of people’s personal messages and was offered as a choice for users at the time,’’ said a Meta spokesperson in a statement. ‘’We also ensured no one would have their accounts deleted or lose functionality of the WhatsApp service because of this update,” the statement added.
