CCI Imposes Rs 213 Crore Penalty on Meta for Unfair Practices Related to WhatsApp Privacy Policy

The Competition Commission of India (CCI) has imposed a Rs 213.14 crore fine on Meta for unfair practices related to WhatsApp's 2021 privacy policy update. The CCI has instructed Meta to halt anti-competitive behaviour and implement specific behavioural changes within a set timeframe. These measures aim to address issues arising from the policy update, which forced users to accept expanded data collection and sharing terms with Meta companies.

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Data Sharing Restrictions

The CCI has prohibited WhatsApp from sharing user data with other Meta companies for advertising purposes for five years. This restriction is part of several remedial measures outlined by the regulator. Additionally, WhatsApp cannot make data sharing a condition for accessing its services in India. Users must be given the option to manage data sharing through an opt-out feature prominently displayed in the app.

In January 2021, WhatsApp informed users about updates to its terms and privacy policies. From February 8, 2021, users had to accept these new terms, which included mandatory data sharing with Meta companies, to continue using the app. Previously, under the August 25, 2016 policy, users could choose whether to share their data with Facebook.

Market Dominance Concerns

The CCI identified two relevant markets: OTT messaging apps via smartphones and online display advertising in India. Meta, operating through WhatsApp, was found dominant in both sectors. The regulator stated that Meta's practices create entry barriers for competitors in the display advertising market by leveraging its position in OTT messaging.

The CCI concluded that WhatsApp's 2021 policy update imposed unfair conditions under the Competition Act. By compelling users to accept expanded data collection without an opt-out option, it undermined user autonomy and abused Meta's dominant position. This contravenes Section 42(a)(i) of the Act.

Behavioural Remedies

Meta and WhatsApp must implement behavioural remedies within a defined timeline. These include providing detailed explanations of user data shared with other Meta companies or products. Each type of data must be linked to its purpose. Users should also have the option to review and modify their data-sharing preferences through a prominent tab in WhatsApp settings.

The CCI's order aims to ensure fair competition and protect user rights in India. By addressing these issues, the regulator seeks to prevent abuse of dominance and promote a competitive environment in both messaging apps and online advertising markets.