The National Company Law Appellate Tribunal (NCLAT) on Tuesday is likely to pronounce its judgment on WhatsApp and its parent company Meta’s challenge against the Competition Commission of India (CCI)’s ₹213.14 crore penalty for alleged abuse of dominant market position through WhatsApp’s 2021 privacy policy update.
The verdict will determine whether the CCI’s findings that update forced users into data sharing across Meta’s platforms withstand judicial scrutiny.
In 2024, the CCI held that WhatsApp’s new terms of service, which required users to accept expanded data collection and mandatory sharing with Meta entities to continue using the app, amounted to exploitative abuse under the Competition Act’s Section 4. The CCI barred WhatsApp from sharing user data with other Meta companies for advertising for five years.
WhatsApp and Meta challenged the order before the NCLAT, arguing that the CCI acted without evidence or jurisdiction.
The appellate tribunal, in January 2025, stayed the five-year data-sharing ban and directed Meta to deposit 50% of the penalty amount pending the outcome of the case.
CCI, through its counsel, senior advocate Balbir Singh, maintained that the 2021 policy was coercive and anti-competitive. Singh told the tribunal that by removing users’ ability to opt out of cross-platform data sharing, an option available under its 2016 policy, WhatsApp effectively forced compliance.
“The 2021 update left users with no real choice. The ‘take it or leave it’ approach created undue urgency and stripped users of autonomy,” Singh told the NCLAT during a hearing.
He argued that Meta’s integration of WhatsApp with Facebook, Instagram, and Messenger created an ecosystem with unmatched reach and network effects, locking users in and making it nearly impossible to switch to alternatives. “Even when options like Telegram or Signal exist, users can’t migrate alone; their entire network must move,” Singh told the bench of NCLAT Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka at the Tribunal’s principal in New Delhi.
The CCI claimed that such data integration amplified Meta’s competitive advantage across its platforms, enabling it to exploit user information for advertising and monetisation.
WhatsApp and Meta’s lawyers, senior advocates Mukul Rohatgi, Kapil Sibal, and Arun Kathpalia, opposed CCI’s claims, arguing it had no empirical data, no user surveys, no rival metrics, and no user testimonies to support its conclusion that WhatsApp abused its dominant position. They pointed out that the NCLAT upheld the 2016 privacy policy, which offered an opt-out from data sharing. Users who exercised that option continue to retain it, they argued, adding that the regulator erred in treating the 2021 update as an entirely new and coercive regime.
In January 2021, WhatsApp announced revised terms of service and privacy policy, effective on February 8 that year. The update expanded the scope of data collection from individuals, businesses, and third parties and enabled integration across Meta’s products.
The CCI took suo motu cognisance of the change and concluded that the policy’s “broad and vague” data-sharing terms amounted to abuse of dominance and violated user choice.
