CCI moves NCLAT seeking clarity on WhatsApp, Meta's data-sharing order

CCI has asked NCLAT to clarify whether the privacy safeguards outlined in its ruling apply to Meta's advertising-related data sharing, as the tribunal reviews challenges from Meta and WhatsApp

The Competition Commission of India (CCI) has approached the National Company Law Appellate Tribunal (NCLAT) seeking clarity on its November 4 ruling, which had overturned the CCI’s directive barring Meta and WhatsApp from sharing user data with other Meta group companies for advertising purposes for five years.

 

In its application, the CCI has asked the appellate tribunal to clarify whether the privacy safeguards the judgment emphasised for non-advertising data sharing should also apply to data used for advertising. This is given the ruling’s focus on user consent and privacy. 

 

The CCI has sought to know from NCLAT if Meta's data sharing, whether for ads or other purposes, has the same strong user privacy protections, transparency, and genuine user consent.

 

A Bench led by Chairperson Justice Ashok Bhushan and technical member Arun Baroka granted Meta and WhatsApp time to file their objections and listed the matter for December 2.

 

The tribunal also issued notice on a separate plea by the companies seeking redaction of confidential portions of the judgment.

 

In November this year, the NCLAT had set aside the CCI’s five-year prohibition on data sharing for advertising, but upheld the penalty of ₹213.14 crore and other directions issued by the regulator. 

 

The two-member Bench had also struck down the CCI’s finding that Meta abused its dominant position in the messaging market to bolster online advertising business.

 

Earlier, in January, the tribunal had granted interim relief to Meta and WhatsApp by staying the data-sharing ban, noting that such a restriction could disrupt WhatsApp’s free-to-use business model.

 

The case traces back to WhatsApp’s 2021 privacy policy update, which made data sharing with Meta group entities mandatory.

 

The CCI took suo motu note of the update, observing that it removed users’ choice to opt out. CCI also adopted a “take it or leave it” approach that undermined user autonomy, in violation of the Competition Act, 2002.

 

In November last year, the CCI imposed a ₹213.14-crore fine on Meta and WhatsApp, barred them from sharing user data with Meta or its affiliates for five years.

 

CCI directed them to clearly disclose the purpose behind each category of data collected, a decision the companies subsequently challenged.