NCLAT overturns CCI ban on Whatsapp sharing user data with Meta platforms

Appellate tribunal NCLAT on Tuesday set aside a section of a Competition Commission of India (CCI) order that had banned WhatsApp from sharing data with Meta Platforms for advertising purposes for five years.

Modifying the order passed by the CCI on November 18, 2024, the NCLAT set aside section 247.1 of the 158-page-long order. However, the tribunal retained the Rs 213 crore penalty on the company and the rest of the order.

"We are setting aside the findings of the Commission insofar as it holds breach of Section 4 (2)(D) and setting aside the directions in paragraph 247.1, (which stated) WhatsApp will not share user data collected on its platform with other data companies or advertising purposes for a period of five years from the date of receipt of this order," said NCLAT bench while pronouncing its order orally in the open court.

"In respect of such sharing of data for advertising purposes, the rest of the impugned order is upheld. The order dated 18 November 2024 is modified accordingly," said a two-member bench comprising Chairperson Justice Ashok Bhushan and Arun Baroka, Member.

A detailed copy of the judgement on this is awaited.

Earlier in September, the National Company Law Appellate Tribunal (NCLAT) reserved its order after completing its hearing over the petitions filed by Meta Platforms and WhatsApp against the orders of the CCI, in which the fair trade regulator had imposed a penalty on both social media major Meta for unfair business ways with respect to the WhatsApp privacy policy update done in 2021.

Both technology companies had also challenged a penalty of Rs 213.14 crore on the social media major for unfair business practices with respect to the WhatsApp privacy policy update done in 2021.

In November last year, the CCI imposed a penalty of Rs 213.14 crore on social media major Meta with respect to the WhatsApp privacy policy update done in 2021.

Meta Platforms and WhatsApp had challenged this order before the NCLAT, which in January this year passing an interim order, stayed the five-year ban imposed by the CCI on data-sharing practices between WhatsApp and Meta for advertising purposes, offering a breather to the tech giant.

In its 156-page-long order, the CCI had on November 18, 2024, directed Meta to cease and desist from anti-competitive practices.

According to a CCI order, Meta and WhatsApp have also been asked to implement certain behavioural remedies within a defined timeline to address the anti-competition issues.

The regulator has called for implementing various remedial measures, including barring WhatsApp from sharing data collected on its platform with other Meta companies or Meta company products for advertising purposes for five years.

Among other directions, CCI has said that sharing of user data collected on WhatsApp with other Meta companies or Meta company products for purposes other than for providing WhatsApp services shall not be made a condition for users to access WhatsApp services in India.