WhatsApp's New Privacy Policy Neither Withdrawn Nor Stayed; Jurisdiction To Investigate Not Closed: CCI Tells Delhi High Court, Judgment Reserved

The Competition Commission of India (CCI) on Monday informed the Delhi High Court that its jurisdiction to investigate Whatsapp's new privacy policy is not closed as the policy in question is neither withdrawn nor stayed by any judicial forum.

A division bench comprising of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad reserved order in the appeals filed by WhatsApp and its parent company Meta against a single bench order declining to interfere with CCI's investigation into WhatsApp's new privacy policy.

Additional Solicitor General N. Venkatraman appearing for CCI submitted that its investigation into WhatsApp's new privacy policy cannot be stalled using judicial process.

"When there is no judicial infirmity, the investigation should go on," ASG submitted further.

ASG Venkatraman further informed the Court that there is no overlap of its enquiry under competition law with the issue of violation of right to privacy pending adjudication before the Apex Court and that the CCI has exercised prudence correctly as it has the jurisdiction to enquire the privacy policy.

On the other hand, rebutting the said submissions, Advocate Tejas Karia appearing for WhatsApp submitted that per judicial discipline, if the highest authority of the Country (Supreme Court) is examining the validity of its privacy policy, then it will not be open for any authority to commence investigation.

Karia also argued that the CCI may proceed with investigation and is not barred in terms of jurisdiction however the authority must await the findings of the Supreme Court.

Karia further informed the Court that WhatsApp had taken informed consent while rolling out the privacy policy and that the users have complete freedom to opt in or out of the same.

He also argued that no user data is shared to other person while sending any messages and that even in the transmission process, the messages are end to end encrypted and there is no question of sharing the data. 

Senior Advocate Mukul Rohatgi appearing for Meta submitted that mere ownership (Meta's ownership of Whatsapp) cannot be reason for CCI to involve it in its investigation in connection with Whatsapp's privacy policy issue.

He also argued that there was no prima facie material with the CCI to start an investigation on the basis that Facebook has abused its dominant position.

The Competition Commission of India had ordered a probe into the new privacy policy of WhatsApp after making a prima facie observation that it was violative of the Competition Act 2000.

Issuing notices to both WhatsApp and its parent company, CCI had observed that the privacy policy terms on sharing of personalised data with Facebook companies was "neither fully transparent nor based on specific, voluntary consent of users".

The CCI had made a prima facie observation that the policy was an abuse of dominant position resulting in violation of Section 4 of the Competition Act.

The anti-trust regulator termed the privacy policy terms "take-it-or-leave-it' terms set by a dominant messaging platform, without providing much information to the users, and observed that the policy prima facie appeared to be "unfair and unreasonable".

The CCI bench comprising Ashok Kumar Gupta(Chairperson), Sangeeta Verma(Member) and Bhagwant Singh Bishnoi(Member) observed that "a thorough and detailed investigation is required to ascertain the full extent, scope and impact of data sharing through involuntary consent of users".

Accordingly, the Commission directed the Director General ('DG') to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act. The Commission also directed the DG to complete the investigation and submit the investigation report within a period of 60days from the receipt of this order.

Case Title: Whatsapp LLC v. CCI, Facebook v. CCI