#WhatsApp #Meta # Bigdata #Antitrust #Competition #Abuseofdominance #Dataprivacy
I wish a happy and promising NEW YEAR, 2026 to all me readers. Apologises for a long gap !
So, WhatsApp data privacy policy Vs. Competition law was in news again towards the end of 2025.
In an important development in India , the Appellate Tribunal , vide its order dated 4th November 2025, while majorly upholding the 18th November , 2024 order of the Competition Commission of India (CCI/Commission) that the mandatory “take it or leave it” condition imposed on its users by WhatsApp under its 2021 Data Privacy Policy , without offering an effective opt-out , amounted to abuse of its dominance as the mandatory acceptance by users was held to be amounting to coercion and unfair condition on users. [Those interested to read more on the CCI’s 18th November , 2024 order may refer to my earlier blog of 6th February , 2025 here.]
The National Company Law Appellate Tribunal (“NCLAT”), vide its decision dated 4th November ,2025 delivered a judgment which largely upheld the Competition Commission of India’s (“CCI”) order against WhatsApp LLC and Meta Platforms, Inc., for abusing its dominance with respect to its the “2021 privacy policy update” on two out of three counts but rejected its finding on the third count of “leveraging” of market power by Meta and also quashed the CCI direction restraining WhatsApp from sharing its data with Meta for 5 years for advertising .
This case originated in 2021, when WhatsApp announced an update to its Terms of Service and Privacy Policy (“Updated Policy”). The Updated Policy mandated users to accept revised terms that enabled expanded data sharing between WhatsApp and its parent company, Meta, and other Meta group entities. Non-acceptance of the Updated Policy resulted in functional restrictions on user accounts, effectively operating as a “take-it-or-leave-it” condition. Taking note of the potential competition concerns, the Competition Commission of India (CCI) took suo motu cognizance of the matter and initiated proceedings under Section 26(1) of the Competition Act, 2002 in Case No. 01 of 2021. The Commission subsequently clubbed the matter with information filed by Ms. Prachi Kohli (Case No. 05 of 2021) and the Internet Freedom Foundation (Case No. 30 of 2021). In March 2021, upon the preliminary inquiry the CCI formed a prima facie opinion that WhatsApp’s conduct disclosed elements of abuse of dominant position and directed Director General (“DG”) to investigate. Thereafter, the DG submitted the investigation report, and the report concluded that WhatsApp and its parent entity Meta has abused its dominant position. Considering the investigation report and the objections/suggestions filed by the parties, the CCI confirmed the findings of contravention as found by the DG in its report and imposed a penalty of ₹213.14 crore along with several behavioural remedies through its order dated 18th November 2024. Against the final Order of the CCI, WhatsApp vide Appeal No. 1/2025 and Meta vide Appeal No. 2/2025 filed an appeal before the NCLAT.
Background of the Case
The controversy surrounding WhatsApp’s data-sharing practices first came before the CCI in the context of WhatsApp’s 2016 Privacy Policy update, introduced after its acquisition by Facebook in 2014. The 2016 update allowed WhatsApp to share limited user account information with Facebook, but importantly provided existing users with an opt-out option. Complaints were filed before the CCI alleging abuse of dominance and anti-competitive conduct. However, the CCI declined to order an investigation, noting the availability of user choice through the opt-out mechanism. This approach was subsequently upheld by the appellate fora, including the National Company Law Appellate Tribunal (“NCLAT”) in Vinod Kumar Gupta v. Competition Commission of India (CA (AT) No. 13 of 2017). Parallel constitutional challenges to the 2016 policy were also dismissed by the Delhi High Court in Karmanya Singh Sareen v. Union of India (W.P.(C) 7663/2016), which recognised the voluntary nature of data sharing under the opt-out framework.
A markedly different situation arose with WhatsApp’s 2021 Privacy Policy update, which fundamentally altered the data-sharing architecture. Unlike the 2016 policy, the 2021 update removed any opt-out option for existing users, including WhatsApp’s over 400 million users in India. Acceptance of the policy became mandatory for continued use of the service, enabling extensive sharing of transactional, location, and behavioural data with Meta’s non-WhatsApp products. This effectively imposed a “take-it-or-leave-it” condition, compelling users to consent under the threat of functional restrictions, in a market characterised by strong network effects, high switching costs, and lack of meaningful interoperability. The 2021 policy triggered widespread public concern and led the CCI to take suo motu cognisance.
Following its suo motu cognisance, the CCI directed an investigation under Section 26(1) of the Competition Act, 2002, focusing on whether WhatsApp had abused its dominant position in the market for OTT messaging applications by imposing unfair conditions on users. In its final order, the CCI concluded that WhatsApp was dominant in the relevant market and that the 2021 Privacy Policy amounted to an abuse of such dominance. The Commission held that the policy undermined user autonomy by denying any real choice, coerced users into sharing expanded categories of data, and facilitated the leveraging of WhatsApp’s dominance into Meta’s broader digital ecosystem. While recognising WhatsApp’s claims of improving service integration and business efficiency, the CCI found these justifications insufficient to offset the anti-competitive harm arising from forced consent and data consolidation. Consequently, the CCI imposed a monetary penalty of INR 213.14 Crores and issued behavioural directions requiring WhatsApp to refrain from sharing with other Meta companies for a period of 5 years etc.
Appeal Proceedings before the NCLAT
In appeal, the NCLAT substantially affirmed the CCI’s analytical framework, with its reasoning resting on a careful delineation of the relevant markets and a rigorous assessment of dominance. The Tribunal endorsed the CCI’s identification of two distinct but related relevant markets: first, the “market for Over-The-Top (OTT) messaging applications for smartphones in India”, in which WhatsApp was found to command an overwhelming market share of approximately 93 per cent, reinforced by strong direct and indirect network effects, high switching costs, and technical features such as end-to-end encryption that create significant entry barriers; and second, the adjacent market for “online display advertising in India”. Applying the factors set out under Section 19(4) of the Competition Act, the NCLAT affirmed WhatsApp’s dominant position in the first relevant market and agreed with the CCI finding that META was not in a dominant position in the second relevant market but in a “leading position”. It rejected WhatsApp’s arguments premised on user multi-homing and the supposed substitutability of competing applications such as Telegram and Signal, emphasising instead the deep consumer lock-in inherent in personal communication services, where social graphs, historical data, and user familiarity materially constrain switching behaviour.
Having established dominance, the Tribunal examined the allegations of abuse under Section 4(2) of the Act. First, it upheld the finding of exploitative abuse under Section 4(2)(a)(i), holding that the 2021 Privacy Policy imposed unfair conditions on users. The NCLAT observed that consent under the policy was effectively coerced, given the stark bargaining asymmetry between WhatsApp and its users, the vague and open-ended language governing data sharing, and the absence of any opt-out mechanism. Secondly, the NCLAT agreed with the CCI that the impugned conduct resulted in an exclusionary denial of market access under Section 4(2)(c). It noted that data signals generated from WhatsApp’s vast user base enhanced Meta’s advertising capabilities, thereby entrenching its position in the online display advertising market and raising data-driven entry barriers for rivals. This conclusion was reinforced by material on record, including affidavits filed by competing market participants. Thirdly, on the allegation of leveraging under Section 4(2)(e), the Tribunal adopted a more nuanced approach. While it was cautious in attributing liability on a strict legal personality basis, it nevertheless acknowledged Meta’s de facto control over WhatsApp and recognised that the impugned data-sharing arrangements facilitated the extension of dominance across markets, even if the finding of leveraging was not upheld in its entirety. Finally, the NCLAT also squarely rejected WhatsApp’s plea of res judicata founded on an earlier CCI decision in Vinod Kumar Gupta. The Tribunal clarified that the earlier proceedings arose from a prima facie closure under Section 26(2) in relation to the 2016 policy and could not preclude scrutiny of the 2021 Privacy Policy, particularly in light of the fundamentally altered policy architecture, the absence of an opt-out option, and the rapidly evolving dynamics of digital markets.
Appellant’s Arguments
Before the NCLAT, WhatsApp and Meta raised multiple challenges to the CCI’s order. At the threshold, they questioned the jurisdiction of the CCI, contending that the issues arising from the 2021 Privacy Policy squarely related to data protection and privacy, which were already under consideration before the Supreme Court in Karmanya Sareen v. Union of India. According to them, the CCI’s intervention risked overlapping with and pre-empting constitutional adjudication.
They also assailed the relevant market definition adopted by the CCI, arguing that the market for OTT messaging services had been drawn too narrowly. WhatsApp contended that user communication spans a much broader universe of services, including SMS, email, video calling, and social media platforms, and that the market ought to have been assessed on a global, rather than an India-specific, basis. On the question of dominance, WhatsApp emphasised the prevalence of multi-homing, the ease with which users could switch between applications, and the rapid growth of competing platforms. It further challenged the CCI’s reliance on metrics such as daily and monthly active users as a reliable proxy for market power.
On the issue of abuse, WhatsApp and Meta denied the imposition of any unfair conditions, asserting that the 2021 policy merely clarified pre-existing data-sharing practices and did not involve coercion or forced consent. They also sought to justify the policy on grounds of efficiency and pro-competitive benefits, including improved service integration and enhanced user experience. With respect to allegations of leveraging, they maintained that WhatsApp and Meta are legally distinct entities, and that no direct or indirect transfer of dominance could be attributed across markets.
Finally, the appellants challenged the remedial directions and penalties imposed by the CCI. They argued that the behavioural remedies, including the five-year prohibition on data sharing for advertising purposes, were disproportionate and arbitrary. The monetary penalty was also assailed on the ground that it impermissibly factored in elements of global turnover and relied on an allegedly retrospective application of the amended penalty framework under the Competition Act.
Respondent’s Counterarguments
In response, the CCI and the informants defended the impugned order by emphasising that the investigation was firmly anchored in competition law concerns, specifically the economic harm arising from WhatsApp’s data practices. They contended that the CCI’s scrutiny did not encroach upon the domain of privacy law, but rather complemented it, since issues of data protection and competition address distinct objectives and can legitimately coexist. The CCI justified its India-specific market definitions, pointing to differences in regulatory frameworks, consumer behaviour, language diversity, and usage patterns that materially shape competition conditions in India. It was argued that OTT messaging services constitute a distinct market due to their real-time, smartphone-based, and interpersonal communication features, which are not substitutable with other forms of digital communication such as email or social media.
On the issue of dominance, the CCI and informants submitted that market power was established through a holistic assessment under Section 19(4) of the Competition Act, taking into account WhatsApp’s overwhelming user base, strong network effects, control over vast datasets, and the structural barriers these factors create for new entrants. They rejected the narrative of easy switching and multi-homing, highlighting the entrenched nature of user relationships and social graphs.
With respect to abuse, the respondents maintained that the findings were supported by substantial evidence. They argued that the 2021 policy imposed coercive consent, effectively stripping users of meaningful choice, and that the accumulation and exclusive use of WhatsApp-derived data conferred unfair advantages in the online advertising market by raising entry barriers for rivals. The allegation of leveraging was also defended on the ground that Meta derived clear competitive benefits from WhatsApp’s dominance through data integration.
Finally, the CCI defended the remedial measures and penalty, asserting that they were proportionate and tailored to the identified harm. The monetary penalty, it was submitted, was calculated on the basis of India-relevant turnover, with due consideration of mitigating factors, and the behavioural remedies were necessary to restore competitive conditions without being punitive in nature.
NCLAT’s Reasoning and Decision
The NCLAT upheld the CCI’s authority to examine WhatsApp’s 2021 Privacy Policy, clearly distinguishing the role of competition law from constitutional challenges relating to privacy. It observed that while privacy issues were pending before constitutional courts, the CCI was concerned with the competitive effects of data practices, particularly their impact on user choice and market structure. The Tribunal agreed with the CCI that privacy is now recognized by competition regulators worldwide as non-price competition parameter. Further, the Tribunal after duly considering international jurisprudence cited by both sides, acknowledged that in data driven markets, the role of competition authorities is significant as data has emerged as a critical parameter of competition and a source of market power. The Tribunal, after noticing the earlier judicial precedents rejected the plea of res judicata raised by WhatsApp noticing that the doctrine of res judicata is in applicable to competition law cases generally and in particular, since the earlier proceedings relating to the 2016 policy could not bar scrutiny of the 2021 policy, which had a significantly expanded scope and operated without any opt-out mechanism.
On market definition, the NCLAT agreed with the CCI that the relevant markets had been correctly delineated. It upheld the narrow product market for “OTT messaging apps through smartphones” and “market for online display advertising” rejecting arguments that sought to include dissimilar modes of communication such as emails or other digital services. The Tribunal also endorsed the India-specific geographic market, finding no basis for adopting a global market definition in light of distinct regulatory and consumer conditions.
With respect to dominance, the Tribunal confirmed WhatsApp’s dominant position in the OTT messaging market based on a comprehensive assessment of factors such as network effects, user lock-in, scale of data, and entry barriers. While it acknowledged Meta’s strong presence in the online display advertising market, the NCLAT stopped short of recording a finding of dominance against Meta in that market.
Turning to abuse of dominance, the NCLAT sustained the findings of contravention under Sections 4(2)(a)(i) and 4(2)(c) of the Competition Act. It held that the 2021 Privacy Policy imposed unfair and coercive conditions on users, effectively depriving them of meaningful choice, and that the resulting data advantages led to a denial of market access by reinforcing entry barriers in adjacent markets. The Tribunal accepted that, in dynamic digital markets, qualitative evidence and structural indicators could sufficiently establish competitive harm.
However, the NCLAT set aside the finding of leveraging of market power by Meta under Section 4(2)(e) of the Act. The Tribunal noted that the CCI had failed to satisfy that both conditions required under this provision are fulfilled. First, the CCI’s claim that Meta used its alleged dominance in the first market i.e. for OTT messaging apps through Smartphones in India to protect its position in the second market, i.e. online display advertising in India. However, Meta is not dominant in the first market and the CCI had wrongly imputed WhatsApp’s dominance in this market to Meta. Second, notwithstanding Meta’s control over WhatsApp, the two entities remain legally distinct, and the statutory requirement of extending dominance from one relevant market to another had not been fully satisfied.
Finally, while largely affirming the CCI’s approach to remedies, the NCLAT modified the relief granted. It quashed the five-year prohibition on data sharing between WhatsApp and Meta for advertising purposes, finding it insufficiently justified, but upheld the remaining behavioural directions aimed at enhancing transparency, ensuring user choice, and providing opt-out mechanisms, as proportionate measures to address the established competition concerns. NCLAT also upheld the monetary penalty of INR 213.14 Crores imposed on Meta.
Conclusion
The NCLAT’s decision marks a significant development in India’s competition law jurisprudence on data-driven markets. By recognising user data as a source of competitive advantage, the judgment reinforces the CCI’s role in scrutinising how data practices can distort competition, even where such practices are framed as privacy or product policy choices. Importantly, the insistence on safeguards such as transparency and meaningful opt-out mechanisms signals that user choice and data autonomy are integral non-price parameters of competition in digital markets.
At the same time, the judgment adopts a calibrated approach to group liability, drawing a distinction between de facto control and statutory requirements for establishing abuse across markets. While the NCLAT declined to extend liability for leveraging in the absence of a clear legal breach, it nonetheless acknowledged the competitive risks posed by integrated data ecosystems, thereby preserving the possibility of accountability where evidence of cross-market abuse is more direct.
For Meta and WhatsApp, the ruling necessitates substantive revisions to their data-sharing framework in India, requiring greater user control and transparency. These changes are likely to have downstream effects on Meta’s advertising strategies, particularly in relation to the use of WhatsApp-derived data. Beyond the parties involved, the judgment sets an important precedent for ongoing and future scrutiny of other large digital platforms, including entities such as Google, where data accumulation and ecosystem effects similarly raise competition concerns.
The decision also sits in broader regulatory harmony with India’s Digital Personal Data Protection Act, 2023, illustrating how competition law and data protection can operate in parallel without institutional conflict. By modifying overbroad remedies while upholding targeted behavioural directions, the NCLAT underscored the need for proportionate and market-sensitive interventions in fast-evolving digital sectors. Overall, the judgment reflects a balanced approach—one that seeks to promote innovation and consumer welfare while firmly curbing the abuse of dominance in data-centric digital markets.
However, since the judgment has since been challenged by the second appeal before the Supreme Court, the issues are still open.
#WhatsApp #Meta # Bigdata #Antitrust #Competition #Abuseofdominance #Dataprivacy
