Meta tells NCLAT WhatsApp user data is its private property in CCI case

Meta argued before NCLAT that WhatsApp user data is its private property, challenging a CCI order that imposed a Rs 213.14 crore fine over WhatsApp's 2021 privacy policy

User data collected by Meta from WhatsApp is Meta’s private property to enhance the platform’s technology, the firm argued before the National Company Law Appellate Tribunal (NCLAT) on Thursday.

 

The NCLAT was hearing application by Meta Platforms and WhatsApp challenging the Competition Commission of India (CCI) order imposing a fine of Rs 213.14 crore on the tech giant for alleged abuse of its dominant position related to WhatsApp’s 2021 privacy policy. The appellate tribunal, however, stayed a part of the CCI order, which had imposed a five-year ban on the company's data-sharing practices in India.

 

“By leveraging user data from WhatsApp, Meta can enhance its technology. It’s (user data) collected by me, it’s my personal property. Shall I give it to my competitors?,” senior advocate Kapil Sibal, appearing for Meta, argued.

   

Senior Advocate Arun Kathpalia, appearing for WhatsApp, told the court there is no change in the data sharing policy of 2021 from the privacy policy of 2016. The users who opted out of not sharing their data would continue to do so with the latest privacy policy as well, he said. 

 

Sibal also argued that the CCI has no jurisdiction to declare the date of privacy policy to be banned.

 

“That’s not their jurisdiction. Entire approach of CCI is legally erroneous and outside the purview of Section 4 of the Competition Act,” he argued. Section 4 of India's Competition Act, 2002 prohibits the abuse of a dominant position in a relevant market. 

 

He added that five million users of the messaging platform never raised privacy concerns but CCI is raising it on their behalf. 

 

Kathpalia also argued on similar lines saying that the CCI is pulling the trigger from the shoulders of the consumers. “Not a single survey was done by the CCI and the action taken by it was without any evidence,” he argued.

 

In March, the NCLAT deferred the hearing in the case, citing the upcoming Digital Personal Data Protection (DPDP) Rules. The government has released the draft rules for consultation, with notification expected by this year.

 

In January, the appellate tribunal had said that the five-year ban by CCI may lead to the collapse of the business model of WhatsApp since it is a free platform.

 

“The ban of five years, which was imposed in paragraph 247.1 (of 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 order said.

 

At the same time, the NCLAT refused to stay the fine of ₹213.14 crore imposed by CCI and told Meta, which owns WhatsApp, to deposit 50 per cent of the fine amount within two weeks for a stay to be effected. 

 

Meta, which has already paid 25 per cent of the fine amount, will be refunded the money paid if it wins the case.

 

The part of the CCI order which the NCLAT has upheld (247.2 and 247.3) said WhatsApp must provide an explanation on what user data is shared with Meta and that data-sharing for purposes beyond WhatsApp services cannot be any condition for accessing WhatsApp in India.

 

Furthermore, users must have an opt-out option for such data-sharing via in-app notification as well as the option to review and modify their choice by going to WhatsApp settings. Future policy updates should also comply with such changes, the CCI order said.