Some relief for WhatsApp as NCLAT grants partial stay on CCI order

The National Company Law Appellate Tribunal (NCLAT) has stayed an order by the Competition Commission of India (CCI) that directed WhatsApp not to share data collected on its platform with its other businesses. The CCI had also imposed a penalty of Rs 213 crore on WhatsApp in November last year.

 

A coram comprising Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka stated, "A ban of five years may lead to the collapse of the business model of WhatsApp LLC since the platform is free. We are of the view that a ban of five years needs to be stayed." This was reported by Bar and Bench.

 

The NCLAT further stayed the penalty of Rs 213.14 crore, subject to WhatsApp/Meta depositing 50 per cent of the amount.

 

“We welcome the NCLAT’s decision to grant a partial stay on the Competition Commission of India’s (CCI) order. While we will evaluate next steps, our focus remains on finding a path forward that supports millions of businesses that depend on our platform for growth and innovation as well as providing high-quality experiences that people expect from WhatsApp,” said a statement from a Meta spokesperson.

 

In its November notice, the CCI had also issued cease-and-desist directions and directed Meta and WhatsApp to implement certain behavioural remedies within a defined timeline. These directions pertain to the implementation of WhatsApp’s 2021 Privacy Policy and the collection and sharing of user data with other Meta companies.

 

The Commission concluded that the 2021 policy update by WhatsApp, implemented on a "take-it-or-leave-it" basis, constitutes the imposition of unfair conditions under the Act, as it compels users to accept expanded data collection terms and the sharing of data within the Meta Group without any opt-out option.

 

This marks the second instance of the CCI taking a strong stand against big tech in India. Last year, Google was also penalised and directed to change its business model in the Android case. The CCI had found that Google abused its dominant position in the Android ecosystem.