Safiya Malik

The National Company Law Appellate Tribunal (NCLAT) has issued an interim order in the appeal filed by WhatsApp LLC and Meta Platforms challenging the Competition Commission of India’s (CCI) findings on WhatsApp’s 2021 privacy policy. The Tribunal upheld the CCI’s directives requiring user transparency and consent mechanisms while staying a five-year ban on data sharing for advertising purposes. A penalty of ₹213.14 crore imposed by the CCI on Meta was also stayed, conditional upon a 50% deposit of the amount.

In January 2021, the CCI initiated a suo motu investigation into WhatsApp’s updated privacy policy, which permitted data sharing with other Meta entities. The Commission alleged that the policy amounted to an abuse of dominance under Section 4 of the Competition Act, 2002, by compelling users to agree to data-sharing terms.

Following the investigation, the CCI issued its order on November 18, 2024, finding WhatsApp in contravention of Section 4(2). The CCI’s directives included:

1. A five-year prohibition on WhatsApp sharing user data with Meta entities for advertising purposes.

2. Requirements for user transparency and consent for non-advertising data-sharing practices.

3. A penalty of ₹213.14 crore on Meta for abusing its dominant position.

Aggrieved by the order, WhatsApp and Meta filed an appeal before the NCLAT, contending that the CCI lacked jurisdiction over privacy-related matters and had overstepped its mandate under the Competition Act.

A coram comprising Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka reviewed the submissions and previous judgments concerning the matter. Addressing the issue of jurisdiction, the NCLAT referred to the Supreme Court’s October 2022 order, which permitted the CCI to investigate WhatsApp’s 2021 privacy policy despite related proceedings before a Constitution Bench of the Supreme Court.

The Tribunal stated: “The above order clearly supports the submissions of the CCI that suo moto proceeding initiated by the CCI was not to be interfered with. However, the Hon’ble Supreme Court has observed that the proceedings shall be decided and disposed of in accordance with law and on its own merits. The initiation of proceeding was thus, not interfered but the ultimate order passed by the Commission has to be tested on its own merits.”

The NCLAT observed that the five-year data-sharing ban imposed in paragraph 247.1 of the CCI’s order could disrupt WhatsApp’s operations. The Tribunal noted: “The ban of five years imposed in paragraph 247.1 may lead to the collapse of the business model which has been followed by WhatsApp LLC.”

However, it upheld the CCI’s directives under paragraphs 247.2 and 247.3, stating the importance of transparency and user consent mechanisms for data-sharing practices unrelated to WhatsApp’s services.

The NCLAT provided the following interim relief:

1. Stay on Five-Year Ban: Paragraph 247.1 of the CCI’s order, which prohibited WhatsApp from sharing user data with Meta entities for advertising purposes for five years, was stayed.

1. Compliance with Transparency Measures: The directives under paragraphs 247.2 and 247.3, requiring user transparency and consent, were upheld and must be complied with by WhatsApp.

1. Stay on Penalty with Conditions: Enforcement of the ₹213.14 crore penalty was stayed, subject to WhatsApp and Meta depositing 50% of the amount within two weeks, factoring in the 25% already paid.

The directives upheld by the Tribunal require WhatsApp to:

• Provide clear and detailed explanations of the user data shared with Meta entities, specifying the purpose of such sharing and linking each data type to its intended purpose.

• Ensure that data sharing for purposes beyond WhatsApp services is optional and not a condition for accessing WhatsApp in India.

• Offer users an opt-out mechanism for non-service-related data sharing, accessible via an in-app notification.

• Enable users to review and modify their consent through a prominent feature in the app’s settings.

• Align all future policy updates with these requirements.

The NCLAT directed both parties to complete their pleadings within six weeks. The matter is scheduled for final hearing on March 17, 2025.

Representation:

• WhatsApp: Senior Advocates Mukul Rohatgi and Arun Kathpalia, supported by Advocates Yaman Verma, Shashank Mishra, Raveena Lalit, Aisha Khan, Shivek Endlaw, Parv Kaushik, Anandita Tayal, Bani Brar, Diksha Gupta, Devanshi Singh, Udit Dedhiya, Aditya Dhupar, and Tahira Kathpalia.

• Meta: Senior Advocate Kapil Sibal, supported by Advocates Tejas Karia, Naval Chopra, Supritha Prodaturi, Akshi Rastogi, Parinita Kare, Aatmik Jain, Ritika Bansal, and Aparajita Jamwal.

• CCI: Advocates Samar Bansal, Manu Chaturvedi, Vedant Kapur, and Kaustubh Chaturvedi.

• Internet Freedom Foundation (Intervenor): Advocates Abir Roy, Vivek Pandey, Aman Shankar, and Biyanka Bhatia.

Case Title: WhatsApp LLC vs. Competition Commission of India & Ors.
Case Number: I.A. No. 280 of 2025 in Competition App. (AT) No. 1 of 2025 with Competition App. (AT) No. 2 of 2025
Bench: Justice Ashok Bhushan (Chairperson), Arun Baroka (Technical Member)

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