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NCLAT stays CCI restrictions on WhatsApp data sharing

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India’s National Company Law Appellate Tribunal (NCLAT) suspended restrictions imposed by the Competition Commission of India (CCI) on Thursday that would have prevented WhatsApp from sharing user data with its parent company, Meta. The ruling provides a temporary reprieve for the tech giant, which counts India as its largest user market.

The tribunal’s decision comes as a response to the five-year ban and a fine of ₹213.14 crore imposed by the Competition Commission of India (CCI). The antitrust watchdog has accused WhatsApp of abusing its market dominance through its controversial 2021 privacy policy, which required users to accept expanded data-sharing practices with Meta or lose access to the messaging platform.

The dispute originated in 2021 when WhatsApp’s privacy update introduced a ‘take-it-or-leave-it’ approach, compelling users to agree to expanded data collection. European users were given an opt-out option, but Indian users were not, a disparity that regulators flagged as problematic.

In November 2024, the CCI ruled that this practice abused Meta’s dominant position in the Indian market. It identified Meta as a key player in two critical areas: over-the-top (OTT) messaging services and online display advertising.

While staying the ban, the NCLAT ordered Meta to deposit $12.35 million, half of the original penalty, within two weeks, reports TechCrunch. The case will now be heard again on March 17. Justice Ashok Bhushan, who leads the tribunal, noted that a prolonged ban could jeopardise WhatsApp’s business model, which relies on offering free services to its users.

Meta’s legal team argued that India’s forthcoming digital privacy law, expected to be enacted later this year, should govern these matters rather than competition rules.

“We welcome the NCLAT’s decision to grant a partial stay on the Competition Commission of India’s order,” said a Meta spokesperson. “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.”

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Kumar Hemant

Kumar Hemant

Deputy Editor at Candid.Technology. Hemant writes at the intersection of tech and culture and has a keen interest in science, social issues and international relations. You can contact him here: kumarhemant@pm.me

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