NCLAT keeps order reserved in WhatsApp, Meta challenge to CCI penalty

The appellate tribunal has reserved its order on WhatsApp and Meta's plea against the Rs 213.14 crore fine imposed by CCI for alleged abuse of dominance over its 2021 privacy policy

The National Company Law Appellate Tribunal (NCLAT) on Thursday reserved its decision on WhatsApp and Meta’s plea challenging the Competition Commission of India’s (CCI’s) order imposing a fine of Rs 213.14 crore on the tech giant for alleged abuse of its dominant position in relation to WhatsApp’s 2021 privacy policy.

 

The CCI had on Tuesday told the NCLAT that the choice of sharing or not sharing data with an internet intermediary should rest solely with the consumer. In its submissions, the competition regulator said WhatsApp should not go beyond its scope of collecting data to provide its services.

 

The watchdog further argued that users of platforms such as WhatsApp must be given the option to opt out of data sharing even after initially accepting it. WhatsApp had earlier told the tribunal that the CCI had overstepped its jurisdiction by ruling on data privacy issues rather than competition issues.

 

In January, the appellate tribunal had noted that the five-year ban imposed by the CCI could lead to the collapse of WhatsApp’s business model, as it is a free-to-use platform.

 

“The ban of five years, which was imposed in paragraph 247.1 (of the CCI order), may lead to the collapse of the business model which has been followed by WhatsApp LLC. It is also relevant to notice that WhatsApp is providing WhatsApp services to its users free of cost,” the tribunal had said.

 

At the same time, the NCLAT refused to stay the Rs 213.14-crore fine imposed by the CCI and directed Meta, which owns WhatsApp, to deposit 50 per cent of the amount within two weeks for the stay to take effect.