NCLAT overturns CCI order restricting WhatsApp data sharing with Meta

The National Company Law Appellate Tribunal (NCLAT) has granted partial relief to Meta Platforms and its messaging arm WhatsApp in the high-profile competition case stemming from WhatsApp’s 2021 privacy-policy update.

While the tribunal upheld the ₹213.14 crore penalty imposed by the CCI, it overturned key findings of dominance and removed the five-year ban on user-data sharing for advertising purposes.

The saga began when in November 2024 the CCI found that WhatsApp had abused its dominant position in the Indian OTT-messaging market by forcing a “take-it-or-leave-it” update in January 2021.

The update made sharing user data with other Meta entities mandatory - removing an earlier opt-out - and the CCI concluded this weakened competition in the online display-advertising market.

In its order, the CCI imposed a hefty fine of ₹213.14 crore and directed that WhatsApp stop sharing user data with other Meta group companies for ad purposes for five years.

However, the NCLAT bench, comprising Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka, struck down the aspects of the CCI’s order related to Section 4(2)(e) of the Competition Act, and the data-sharing ban contained in paragraph 247.1 of the decision. The tribunal held those findings “set aside”, while preserving the rest of the CCI’s directions.

Importantly, NCLAT recognised Meta’s argument that the data-sharing ban could jeopardise WhatsApp’s free-to-use business model and that issuesaround data protection may lie outside the CCI’s jurisdiction.

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