Meta Appeals CCI’s Fine Over WhatsApp Privacy Policy Update

What’s in today’s article?

• Why in News?
• What is Competition Commission of India (CCI)?
• What is WhatsApp’s 2021 privacy policy?
• What is WhatsApp-CCI dispute?

Why in News?

WhatsApp plans to appeal the Competition Commission of India’s (CCI) ruling imposing a $25.4 million fine for anti-competitive practices related to its 2021 privacy policy. 

The policy, requiring user data sharing with Meta-owned apps for advertising, sparked concerns over competition and privacy, with allegations that WhatsApp exploited its dominant position to enforce the terms.

What is Competition Commission of India (CCI)?

• About
  • The Competition Commission of India (CCI) is a statutory body established in March 2009 under the Competition Act, 2002.
• Objectives:
  • Eliminate practices having adverse effect on competition
  • Promote and sustain competition
  • Protect the interests of consumers
  • Ensure freedom of trade in the markets of India
• Members
  • The Commission consists of one Chairperson and six members who shall be appointed by the Central Government.
• Functions of CCI
  • The commission is a quasi-judicial body who also gives opinions to statutory authorities.
  • It is also mandated to undertake competition advocacy, create public awareness and impart training on competition issues.
  • In order to fulfil its objectives, the commission may: 
    • conduct an enquiry into certain kinds of agreements and dominant position of enterprise,
    • determine whether an agreement has AAEC (appreciable adverse effects on competition).

What is WhatsApp’s 2021 privacy policy?

• About
  • In January 2021 WhatsApp rolled out a new privacy policy and had given users time till 28 February 2021 to accept and update.
  • The 2021 update introduced significant changes, particularly in sharing user data between WhatsApp and Meta’s platforms like Facebook and Instagram.
  • It allowed the sharing of user data, including phone numbers, contacts, and transaction details, for advertising and business-related purposes.
  • WhatsApp claims the update was necessary to improve business features. It assures users that private messages remain encrypted and secure.
    • The policy primarily concerns data shared with businesses and third-party apps for targeted ads and customer service integration.
• Concerns raised
  • WhatsApp's 2021 privacy policy sparked global controversy, particularly in India, over concerns about undue control over user data and limited consumer choice, with non-compliance risking app access loss. 
  • While WhatsApp claimed the update aimed to enhance business-user communication, critics feared it would commercialize personal data. 
  • The absence of comprehensive data protection laws in India heightened the backlash, prompting legal scrutiny and the CCI investigation.
• Have other countries raised objections?
  • WhatsApp has faced global legal challenges over its 2021 privacy policy.
  • European Union: In September 2021, Ireland’s data regulator fined WhatsApp GBP 225 million for failing to meet transparency requirements under the General Data Protection Regulation (GDPR). WhatsApp has appealed the decision.

What is WhatsApp-CCI dispute?

• About
  • The WhatsApp-CCI dispute involves an investigation into WhatsApp's 2021 privacy policy, which mandated user data sharing with Meta, raising concerns about anti-competitive practices and data privacy violations.
  • CCI's probe against WhatsApp
  • The CCI initiated its probe in 2021 to assess whether the policy harmed competition by unfairly exploiting user data.
  •  The CCI has now fined Meta $25.4 million and directed WhatsApp to stop sharing user data with Meta-owned apps for advertising purposes for the next five years.
  • This investigation is crucial in India, where data protection laws are still evolving. It has also sparked broader discussions about data privacy and competition law.
• Timeline of WhatsApp-CCI dispute
  • January 2021: WhatsApp announced an update to its privacy policy, mandating users to accept terms that included sharing data with Facebook and its subsidiaries.
  • March 2021: The CCI launched a suo moto investigation into the update, citing concerns over potential abuse of dominance and anti-competitive practices.
  • April 2021: WhatsApp and Meta challenged the CCI’s jurisdiction in the Delhi High Court.
  • April 22, 2021: The Delhi High Court dismissed the petitions, allowing the CCI to proceed.
  • August 25, 2022: A division bench of the Delhi High Court upheld the single judge’s decision, reaffirming the CCI’s authority.
  • October 2022: The Supreme Court dismissed appeals by WhatsApp and Meta, permitting the investigation to continue.
  • November 18, 2024: The CCI fined Meta $25.4 million and ordered WhatsApp to stop sharing user data with other Meta-owned apps for advertising purposes for five years.
  • November 19, 2024: Meta announced its intention to appeal the CCI’s decision.

Q.1. Why did the CCI fine Meta over WhatsApp’s privacy policy?

The CCI imposed a ₹213 crore fine, citing anti-competitive practices and concerns over user data sharing between WhatsApp and Meta, which allegedly exploited WhatsApp's market dominance.

Q.2. What are the main objections to WhatsApp’s 2021 privacy policy?

Critics argue the policy forces users to share data with Meta apps for advertising, limiting choice and raising privacy concerns, especially in the absence of robust data protection laws in India.

News: Meta to appeal CCI’s ₹213 crore fine for WhatsApp privacy policy change | Ministry of Corporate Affairs | Business Standard