The Competition Commission of India (CCI) has imposed a penalty of Rs 213.14 crore on Meta for abusing its dominant position through the implementation of WhatsApp’s 2021 Privacy Policy, which involved collecting and sharing user data with other Meta companies.
The Commission issued cease-and-desist directions and instructed Meta and WhatsApp to implement specific behavioural remedies within a set timeline.
For the next five years, WhatsApp is not allowed to share user data collected on its platform with other Meta companies or products for advertising purposes, the competition regulator said in a release.
After the period, WhatsApp cannot impose conditional access to the app and ask users to allow sharing data with other Meta companies or products for purposes other than providing WhatsApp services, such as advertising.
In addition, all users in India, including those who accepted the 2021 update, must be given the choice to manage data sharing through an opt-out option clearly shown in an in-app notification, as well as the option to review and change their data-sharing preferences through a prominent tab in WhatsApp settings.
The commission also noted that WhatsApp must clearly explain what user data is shared with other Meta companies or products, specifying the purpose for each type of data.
It also highlighted that future policy updates must adhere to these rules.
In this case, the Commission identified two key markets: one for OTT messaging apps on smartphones in India, and the other for online display advertising in India.
It was found that Meta, operating through WhatsApp, is dominant in the market for messaging apps on smartphones in India. Additionally, Meta was also found to hold a leading position in online display advertising in India compared to its competitors.
In January 2021, WhatsApp notified users of updated terms requiring them to accept expanded data collection and mandatory sharing with Meta companies to continue using the messaging app.
“The Commission has concluded that the 2021 policy update by WhatsApp on a ‘take-it-or-leave-it’ basis constitutes an imposition of unfair condition 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,” it remarked.
Due to the strong network effects and lack of other effective options, the 2021 update forces users to accept the changes, limiting their freedom of choice. This is seen as an abuse of Meta’s dominant position.
The Commission also found that sharing WhatsApp user data with Meta companies for non-WhatsApp services creates a barrier for competitors in the display advertising market.
It also concluded that Meta used its dominance in messaging apps to protect its position in the online display advertising market.
