We are being punished for providing superior services, Meta tells NCLAT

Meta told NCLAT it was being punished by CCI for offering superior services and highlighted lapses in the watchdog's findings on WhatsApp's 2021 privacy policy case

Social media conglomerate Meta on Tuesday told the National Company Law Appellate Tribunal (NCLAT) that it was being punished by the Competition Commission of India (CCI) for “providing superior services”.

 

During a hearing on the application by Meta and its subsidiary WhatsApp challenging the CCI order imposing a fine of Rs 213.14 crore for alleged abuse of dominance related to WhatsApp’s 2021 privacy policy, the company argued that the competition regulator’s findings were flawed.

 

The counsel for Meta said the first miss was that CCI had passed the order not on facts but on media frenzy that WhatsApp’s 2021 privacy policy would compromise end-to-end encryption. The second was that CCI overlooked the fact that the 2021 policy updates did not go beyond the scope of the 2016 privacy policy.

   

The third, the counsel added, was a fundamental misunderstanding about the opt-out mechanism of WhatsApp’s 2021 policy.

 

“WhatsApp shares data with Meta for advertising in limited or optional scenarios. There is an opt-out,” senior advocate Amit Sibal, appearing for Meta, told the NCLAT.

 

The next hearing is likely on September 18, when CCI will present its arguments. WhatsApp had earlier told the tribunal that the competition regulator had overstepped its jurisdiction by ruling on data privacy issues rather than competition matters.

 

In January, the appellate tribunal had said that the five-year ban imposed by CCI could lead to the collapse of WhatsApp’s business model, since the platform operates free of cost. 

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