The Competition Commission of India (CCI) has imposed a penalty of Rs 213.14 crore on Meta for abusing its dominant position.
The penalty pertains to the controversial implementation of WhatsApp’s 2021 privacy policy, which mandated data sharing between WhatsApp and other Meta firms like Facebook, which had raised concerns about user privacy and market fairness.
The anti-trust regulator has also issued cease-and-desist directions and directed Meta and WhatsApp to implement certain behavioural remedies within a defined timeline.
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The CCI identified two relevant markets, OTT messaging apps via smartphones in India, where WhatsApp was deemed dominant; and online display advertising in India, where Meta holds a leading position.
The 2021 privacy policy required users to accept expanded data collection and mandatory sharing with Facebook to continue using WhatsApp, removing the opt-out option available under the 2016 policy. The CCI ruled this “take-it-or-leave-it” approach as an unfair condition, constituting a violation of Section 4(2)(a)(i) of the Competition Act, 2002.
Additionally, the CCI found Meta guilty of creating entry barriers for competitors in the online display advertising market by leveraging WhatsApp user data (Section 4(2)(c)); protecting its dominance in advertising by exploiting its market power in the messaging app space (Section 4(2)(e)).
To curb the anti-competitive practices, the CCI has issued certain directives to Meta and WhatsApp, chief of which is no data sharing for Ads. Under it WhatsApp is prohibited from sharing user data with Meta companies for advertising purposes for five years.
It has also directed enhanced transparency wherein WhatsApp must clearly outline the data shared with Meta companies, linking each type of data to specific purposes.
Further, under opt-out option, users must have the ability to opt out of non-service-related data sharing via in-app notifications and app settings.
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The CCI had in 2021 directed an investigation into WhatsApp’s privacy policy update,
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