On Monday, the Appellate Tribunal, NCLAT, made it clear that its earlier ruling regarding WhatsApp’s privacy and consent protections also covers the gathering and dissemination of user data for any non-WhatsApp uses, including advertising and non-advertising. This explanation was included in an order issued in response to an application filed by the Competition Commission of India (CCI), which asked for clarity on the extent of the NCLAT’s previous decision.
Important decisions regarding user rights
The NCLAT panel, which is made up of Member Arun Baroka and Chairperson Justice Ashok Bhushan, emphasized that Meta (the appellant) and WhatsApp “cannot assert unilateral or open-ended rights over user data.”
The tribunal restated its previous position, saying:
We had held unequivocally that “users must retain the right to decide what data is collected, for what purposes, and for how long.” Only with the specific and revocable approval of the relevant users may any non-essential collection or cross-use, such as advertising, take place, according to NCLAT.
Additionally, the NCLAT stated that “their rights are protected for all times, and exploitation is removed, which has been an issue with the 2021 WhatsApp policy” is ensured by giving users the choice to opt in or out of data sharing at any point, whether using regular or optional features.
Clarified remedial instructions
The NCLAT approved the CCI’s application based on this analysis, making it clear:
“It is made clear that WhatsApp user data collection and sharing for all non-WhatsApp purposes, including non-advertising and advertising purposes, will be subject to the remedial instructions contained in Paras 247.2.1 to Paras 247.2.4 of the Applicant’s contested order dated 18.11.2024.”
WhatsApp was given three months by the tribunal to follow the instructions and make the required adjustments.
The NCLAT decision’s background
By overturning a portion of the CCI’s initial decision, the NCLAT’s November 4 verdict gave WhatsApp partial relief. The NCLAT had in that initial ruling:
upheld the social media platform’s Rs 213 crore fine.
verified that WhatsApp’s 2021 policy violated Sections 4(2)(a)(i) and 4(2)(c) of the Competition Act, resulting in a condition of market denial and an abuse of dominance.
Set aside the CCI order’s paragraph 247.1 at first while maintaining paragraph 247.2. This created a situation where user consent was obviously needed for non-advertising reasons but not specifically mentioned for advertising. That gap is filled by this most recent explanation.
The NCLAT had previously determined in a 184-page ruling that cross-platform data sharing between WhatsApp and Meta strengthened Meta’s competitive edge in the display advertising industry, thereby erecting a barrier to entry for competitors in digital advertising who lacked comparable access to WhatsApp data.
However, given that WhatsApp and Meta are separate legal entities, the tribunal also decided that the CCI’s finding of a violation of Section 4(2)(e) was “not sustainable,” stating that it could not be concluded that Meta had used its dominance in one market (OTT messaging) to protect or extend dominance in another (online display advertising).
Regarding the 2021 WhatsApp privacy policy modification, the CCI levied the initial penalty of Rs 213.14 crore in November of last year. The NCLAT had earlier issued an interim decision in January, postponing the five-year ban on data-sharing practices between Meta Platforms and WhatsApp for advertising reasons, in response to a challenge.
