NCLAT quashes CCI's WhatsApp-Meta data ban, upholds ₹213 crore penalty

The tribunal said CCI's five-year ban on WhatsApp data sharing with Meta was unwarranted but upheld the Rs 213 crore penalty, ruling no abuse of dominance in the messaging market

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The National Company Law Appellate Tribunal (NCLAT) on Tuesday set aside the Competition Commission of India’s (CCI) direction barring Meta and WhatsApp from sharing user data with other Meta group entities for advertising purposes for five years. The tribunal, however, upheld the Rs 213.14 crore penalty and other directions issued by the CCI.

 

What did the NCLAT decide on the WhatsApp-Meta case?

 

A two-member bench of NCLAT Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka also struck down the CCI’s finding that Meta had abused its dominant position in the messaging market to strengthen its hold in online advertising.

 

In January 2025, the tribunal had granted interim relief to the tech companies by staying the five-year data-sharing ban, noting that such a restriction could disrupt WhatsApp’s free-to-use business model.

 

What led to the dispute between CCI and WhatsApp-Meta?

 

The case originated in January 2021, when WhatsApp rolled out an updated privacy policy mandating data sharing with Meta group firms. The CCI took suo motu cognisance, observing that the update effectively removed users’ choice to opt out of data sharing. It held that the “take it or leave it” approach violated the Competition Act, 2002, by eroding user autonomy.

 

In its November 2024 order, the CCI fined Meta and WhatsApp Rs 213.14 crore, barred them from sharing user data with Meta or its affiliates for five years, and directed them to disclose the purpose of each category of data collected. Meta Platforms and WhatsApp subsequently challenged the order before the NCLAT.

 

How does the ruling affect the CCI’s digital enforcement approach?

 

Experts said the NCLAT judgment effectively nullifies the key charge of “abuse of dominant position” — the most significant element of the CCI’s order.

 

“The ruling substantially weakens the CCI’s core finding of abuse of dominance, which carries far greater regulatory and reputational consequences than a procedural breach,” said Raheel Patel, Partner at Gandhi Law Associates.

 

He added, “It underscores that competition enforcement must rest on demonstrable market harm, not on speculative concerns about data or privacy. The decision may embolden tech companies to challenge expansive interpretations of dominance and push the CCI toward a more evidence-based digital regulation framework.”

 

What are the broader implications for digital market regulation?

 

B. Shravanth Shanker, Advocate-on-Record at the Supreme Court, said the judgment’s strength lies in its clarification of evidentiary standards and analytical frameworks essential for coherent digital regulation.

 

“Its principal limitation lies in the potential inadequacy of behavioural remedies to address entrenched structural advantages arising from integrated data ecosystems,” Shanker said.

 

“As a foundational precedent for future technology platform proceedings, this judgment will substantially influence India’s regulatory approach to digital markets during the next phase of the technology sector’s maturation,” he added.