CCI-Meta Data Sharing Order: NCLAT stays five-year ban imposed by CCI on WhatsApp
In a big relief for Meta, the NCLAT has stayed a five-year ban imposed by CCI on WhatsApp for sharing user data with Meta and other applications for advertising. But questions around privacy regulations continue
- Feb 7, 2025,
- Updated Feb 7, 2025 8:25 PM IST
On January 23, the National Company Law Appellate Tribunal (NCLAT) gave significant relief to popular messaging app WhatsApp when it stayed a five-year ban imposed by the Competition Commission of India (CCI) directing it not to share data collected on its platform with its parent company Meta for advertising purposes.
The NCLAT in its order also stayed the penalty of Rs 213.14 crore imposed by the CCI but directed WhatsApp to deposit 50% of it within two weeks. The deposit will be refunded to the social media giant if they win the case.
The genesis of the NCLAT ruling lies in a November 18, 2024, order by the CCI, which is India’s anti-trust regulator, that had imposed the fine on Meta for abusing its dominant position relating to a privacy policy update by its messaging app WhatsApp in 2021.
The update by WhatsApp made data sharing with Meta mandatory for all users, removing the earlier option to opt out. As a result, users had to accept the new terms, which include data sharing with Meta, in order to continue using the platform, the CCI order had noted.
However, the NCLAT Bench, comprising of Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka, noted that the ban of five years “may lead to the collapse of business model” of WhatsApp. “It is also relevant to notice that WhatsApp is providing WhatsApp services to its user free of cost,” they said in the order.
Welcoming the NCLAT’s decision to grant a partial stay on the CCI order, a Meta spokesperson said, “While we will evaluate next steps, our focus remains on finding a path forward that supports millions of businesses that depend on our platform for growth and innovation as well as providing high-quality experiences that people expect from WhatsApp.”
While the CCI order was seen to be a landmark development that would have repercussions on data privacy and competition in the fast-evolving digital economy, there continue to be questions over regulatory overlap given that the Digital Personal Data Protection Act, 2023, looks into the issue of data privacy of users.
The Digital Competition Bill that would empower the CCI to specifically deal with issues around digital competition is also still in the works and would require some more time to be taken to the Parliament.
This was also pointed out by the Counsel for the appellant that noted that the DPDP Act has been approved by the President that the CCI was to await its enforcement for finding any violations by WhatsApp.
“The remedies on privacy and data protection are without jurisdiction and expertise of CCI,” they further contended.
The CCI, however, argued that WhatsApp is a dominant player and it has abused its dominance, which has been found proved.
Bharat Budholia, Partner at corporate law firm AZB & Partners notes, given that the NCLAT has given a partial stay on the CCI order, both parties may explore the option of challenging the order before the Supreme Court of India. “It would also be interesting to see if the upcoming data protection regime, which is expected to be enforced soon, would have any bearing on the merit of the case,” he says.
Anju Thomas, Associate Partner, AQUILAW believes that though the NCLAT order comes as a huge relief to the multinational company, the matter raises major privacy concerns and as it sets aside a well-reasoned judgment of CCI.
“The delay in enforcement of Digital Personal Data Protection, 2023 or Digital Personal Data Protection Rules, 2025, has left WhatsApp users with no choice but to accept the NCLAT order with a pinch of salt and wait until the above data privacy legislations are enforced,” Thomas says.
A big game changer could be the enforcement of the DPDP Act. The NCLAT too has said that both parties are granted leave to pray for modification of its order in case the Act is enforced, or any other statutory provisions are enforced regulating to data protection and sharing of the data.
“NCLAT examined the CCI order from a limited perspective—whether WhatsApp abused its dominant position in the Indian market while sharing the data to its parent company. Whether the data sharing breached data protection regulations has to be examined separately under the new DPDP rules,” says Shiju P. V., Senior Partner at law firm, IndiaLaw LLP.
The next date for hearing of the case has been set as March 17, but it seems this will be a long-drawn contest and for now there seem to be no clear answers on maintaining the delicate balance between market freedom and consumer interests.
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On January 23, the National Company Law Appellate Tribunal (NCLAT) gave significant relief to popular messaging app WhatsApp when it stayed a five-year ban imposed by the Competition Commission of India (CCI) directing it not to share data collected on its platform with its parent company Meta for advertising purposes.
The NCLAT in its order also stayed the penalty of Rs 213.14 crore imposed by the CCI but directed WhatsApp to deposit 50% of it within two weeks. The deposit will be refunded to the social media giant if they win the case.
The genesis of the NCLAT ruling lies in a November 18, 2024, order by the CCI, which is India’s anti-trust regulator, that had imposed the fine on Meta for abusing its dominant position relating to a privacy policy update by its messaging app WhatsApp in 2021.
The update by WhatsApp made data sharing with Meta mandatory for all users, removing the earlier option to opt out. As a result, users had to accept the new terms, which include data sharing with Meta, in order to continue using the platform, the CCI order had noted.
However, the NCLAT Bench, comprising of Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka, noted that the ban of five years “may lead to the collapse of business model” of WhatsApp. “It is also relevant to notice that WhatsApp is providing WhatsApp services to its user free of cost,” they said in the order.
Welcoming the NCLAT’s decision to grant a partial stay on the CCI order, a Meta spokesperson said, “While we will evaluate next steps, our focus remains on finding a path forward that supports millions of businesses that depend on our platform for growth and innovation as well as providing high-quality experiences that people expect from WhatsApp.”
While the CCI order was seen to be a landmark development that would have repercussions on data privacy and competition in the fast-evolving digital economy, there continue to be questions over regulatory overlap given that the Digital Personal Data Protection Act, 2023, looks into the issue of data privacy of users.
The Digital Competition Bill that would empower the CCI to specifically deal with issues around digital competition is also still in the works and would require some more time to be taken to the Parliament.
This was also pointed out by the Counsel for the appellant that noted that the DPDP Act has been approved by the President that the CCI was to await its enforcement for finding any violations by WhatsApp.
“The remedies on privacy and data protection are without jurisdiction and expertise of CCI,” they further contended.
The CCI, however, argued that WhatsApp is a dominant player and it has abused its dominance, which has been found proved.
Bharat Budholia, Partner at corporate law firm AZB & Partners notes, given that the NCLAT has given a partial stay on the CCI order, both parties may explore the option of challenging the order before the Supreme Court of India. “It would also be interesting to see if the upcoming data protection regime, which is expected to be enforced soon, would have any bearing on the merit of the case,” he says.
Anju Thomas, Associate Partner, AQUILAW believes that though the NCLAT order comes as a huge relief to the multinational company, the matter raises major privacy concerns and as it sets aside a well-reasoned judgment of CCI.
“The delay in enforcement of Digital Personal Data Protection, 2023 or Digital Personal Data Protection Rules, 2025, has left WhatsApp users with no choice but to accept the NCLAT order with a pinch of salt and wait until the above data privacy legislations are enforced,” Thomas says.
A big game changer could be the enforcement of the DPDP Act. The NCLAT too has said that both parties are granted leave to pray for modification of its order in case the Act is enforced, or any other statutory provisions are enforced regulating to data protection and sharing of the data.
“NCLAT examined the CCI order from a limited perspective—whether WhatsApp abused its dominant position in the Indian market while sharing the data to its parent company. Whether the data sharing breached data protection regulations has to be examined separately under the new DPDP rules,” says Shiju P. V., Senior Partner at law firm, IndiaLaw LLP.
The next date for hearing of the case has been set as March 17, but it seems this will be a long-drawn contest and for now there seem to be no clear answers on maintaining the delicate balance between market freedom and consumer interests.
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