NCLAT reserves verdict on Meta and Whatsapp pleas against CCI penalty

The appellate tribunal NCLAT has completed hearing and reserved its order on the appeals filed by Meta Platforms and WhatsApp, challenging the CCI's penalty on the social media major for the 2021 WhatsApp privacy policy update.

An NCLAT bench, comprising Chairperson Justice Ashok Bhushan and Member (Technical) Arun Baroka, has directed the parties to file written submissions by October 6.

"All the parties to file concise notes of submissions of not more than ten pages by October 6, 2025," said the bench on Thursday, while reserving its judgment.

The National Company Law Appellate Tribunal (NCLAT) was hearing the petition by the tech giant Meta, which 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.

Senior Counsel Arun Kathpalia and Amit Sibbal have completed their submissions in the rejoinder over arguments by the Senior Advocate Balbir Singh appearing for the Competition Commission of India (CCI) before the NCLAT, an appellate authority over the orders passed by the fair trade regulator.

In November last year, 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, passed an interim order, staying the five-year ban imposed by the fair trade regulator on data-sharing practices between WhatsApp and Meta for advertising purposes, offering a breather to the tech giant.

Kathpalia, in his rejoinder over CCI's arguments on Thursday, submitted that the fair trade regulator's strategy has been to repeat the same inaccuracies.

He submitted that CCI made several inaccurate statements, for instance, the 2021 Privacy Policy overrode the opt-out provided to users in 2016. Moreover, the fair trade regulator claimed that the five-year ban was a reasonable period which would allow "competition to revive".

However, no such reasoning is present in the order, he added.

While Sibal, representing Meta, argued that CCI did not address most of his arguments made during the initial hearing and also presented a list of the same to the appellate tribunal.

According to Sibal, CCI's arguments that it does not need to find Meta dominant in the alleged market for online display advertisements to show that there was a denial of market access in this market are legally untenable and based on an incorrect reading of Supreme Court judgements.

CCI continues to ignore that limited data is shared by WhatsApp with Meta, he added.

CCI's counsel Balbir Singh, while opposing the petitions by the social media platforms, had submitted that WhatsApp had abused its position by imposing the 2021 privacy policy on a "take it or leave it" basis.

Moreover, he also rejected that CCI has no jurisdiction in this issue as the matter was related to data protection and said it is related to a larger public interest and comes under the domain of the fair trade regulator. Singh submitted that competition law and data protection law serve complementary roles.

In its 156-page-long order, 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 providing WhatsApp services shall not be made a condition for users to access WhatsApp services in India.