Breaking: Whatsapp Privacy Policy Case: NCLAT Grants Partial Relief to Meta, WhatsApp; Allows User Data Sharing for Ads

The National Company Law Appellate Tribunal (NCLAT) on Tuesday granted partial relief to Meta Platforms Inc. and WhatsApp LLC in their appeal against a Competition Commission of India (CCI) order related to WhatsApp's 2021 privacy policy update. While the tribunal upheld the Rs 213.14 crore penalty imposed by the CCI, it set aside the finding that Meta had leveraged WhatsApp's dominant position in the messaging market to strengthen its presence in online display advertising, overturning one of the main charges of abuse of dominance. A two-member bench comprising Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka also quashed the CCI's direction prohibiting Meta and WhatsApp from sharing user data with other Meta group companies for advertising purposes for a period of five years. “The findings of the Commission so far as they relate to Section 4(2)(e) and the direction in paragraph 247.1 are set aside. The rest of the order is upheld,” the bench said.As per paragraph 247.1 of the CCI order, "WhatsApp will not share user data collected on its platform with other Meta Companies or Meta Company Products for advertising purposes, for a period of 5 (five) years from the date of receipt of this order. After expiry of the said period, the directions at para 247.2 (except para 247.2.1) will apply mutatis mutandis in respect of such sharing of data for advertising purposes"Earlier, in January 2025, NCLAT had granted temporary relief by staying the five-year ban on data sharing, citing potential disruption to WhatsApp's free-to-use business model. The matter traces back to January 2021, when WhatsApp updated its privacy policy to make sharing user data with other Meta companies mandatory. The CCI took suo motu cognizance of this update, noting that it removed users' ability to opt out of data sharing. In its November 18, 2024 order, the CCI held that the update constituted an unfair imposition and found that Meta leveraged WhatsApp's dominant position in the OTT messaging market to strengthen its position in the online display advertising market, in contravention of the Competition Act. During the appeal, Meta argued that the CCI had exceeded its jurisdiction by addressing privacy and data protection issues, while the CCI maintained that its directions were aimed at addressing anti-competitive practices arising from WhatsApp's dominant position. The CCI's other directions, which are now fully in effect following the dismissal of the appeal, include prohibiting the sharing of WhatsApp user data with other Meta companies or products for advertising purposes for five years, providing clear explanations to users about what data is shared and why, and offering users an opt-out mechanism along with the ability to modify their choices. Case Title: Whatsapp LLC v CCI with Meta Platforms Inc v CCICase Number: Competition App (AT) No. 1 of 2025

Breaking: Whatsapp Privacy Policy Case: NCLAT Grants Partial Relief to Meta, WhatsApp; Allows User Data Sharing for Ads

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