Anti-trust regulator levy Rs 213 crore penalty on Meta for 'forcing' WhatsApp users to share data
The anti-trust regulator -Competition Commission of India (CCI)-on Monday imposed a penalty of Rs 213 crore on US tech giant Meta, which owns and operates the messaging app WhatsApp, for abuse of its dominant position. The punitive action by the CCI comes after WhatsApp forced users to mandatorily share data with other Meta companies such as Facebook.
The regulator has also directed WhatsApp to not share user data collected on its platform with other Meta Companies or Meta Company Products for advertising purposes, for a period of five years.
As per the CCI order, Whatsapp in January 2021 notified users that they were required to accept the new terms of services and privacy policies, including expanded scope of data collection as well as mandatory data sharing with Meta companies, to continue using the app.
"Under the previous privacy policy dated 25 August 2016, WhatsApp users were given the option to decide whether they wanted to share their data with Facebook. However, with the latest policy update in 2021, 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 said in its order.
The CCI found WhatsApp to be dominant in the market for OTT (over-the-top) messaging apps through smartphones in India, and accordingly concluded that the 2021 policy update by the app on a ‘take-it-or-leave-it’ basis constitutes an imposition of unfair condition under the anti-trust Act, as it compels all users to accept expanded data collection terms and sharing of data within Meta Group without an option to opt-out.
“Given the network effects and lack of effective alternatives, the 2021 Update forces users to comply, undermining their autonomy, and constitutes an abuse of Meta’s dominant position,” concluded the regulator.
On the issue of sharing of data between Meta companies, the Commission has concluded that sharing of WhatsApp users’ data between Meta companies for purposes other than providing WhatsApp Service creates an entry barrier for the rivals of Meta and thus, results in denial of market access in the display advertising market.
It also concluded that Meta has engaged in leveraging its dominant position in the OTT messaging apps through smartphones to protect its position in the online display advertising market and the same is in contravention of provisions of the Competition Act.