CCI says 'no inherent conflict or repugnancy' between competition, data protection laws

The Competition Act supplements data protection regulations by placing heightened responsibilities on dominant firms and there is no inherent conflict or repugnancy between the two laws, according to fair trade watchdog CCI.

Besides, the regulator has said a broader view of the concept of user data is crucial in analysing data-related competition concerns in digital markets.

The observations are part of the Competition Commission of India's 156-page order imposing a ₹213.14 crore penalty on social media major Meta for unfair business ways with respect to WhatsApp privacy policy update done in 2021.

Elucidating on user data in digital markets, CCI said data-related practices might violate data protection laws but they can also be seen as the imposition of unfair terms under competition law.

"This overlap creates a point of intersection between data protection and competition law, with each addressing different aspects of harm. Further, while data protection laws primarily focus on the processing of personal data, competition law can also intervene when non-personal but competition-sensitive data is abused," it said.

In this context, CCI noted that it is important to recognise that the concept of "user data" in digital platforms encompasses not just personal data, but also anonymized and aggregated data, which may not always align with traditional definitions of personal data.

"This broader view is crucial when analysing data-related competition concerns in digital markets," it added.

According to the regulator, the order, passed on November 18, relates to how WhatsApp's 2021 Privacy Policy was implemented and how user data was collected and shared with other Meta companies.

For the case, two relevant markets were delineated, OTT messaging apps through smartphones in India, and online display advertising in India.

At a time when there are concerns about data privacy and possible misuse of user data, CCI, in the order, also highlighted that data-related practices can sometimes trigger concerns that require simultaneous intervention from multiple branches of law.

"For instance, data-driven conduct by a dominant firm may raise privacy concerns under data protection law and also constitute an abuse of market dominance under competition law. Therefore, a comprehensive approach is necessary to create a market structure that is competitive, transparent, and beneficial to consumers in terms of price, quality, privacy, choice, etc," the order said.

According to CCI, diverse data collected by digital platforms plays a crucial role in enhancing product quality, improving services, and boosting overall productivity.

"Furthermore, the insights gained from diverse data facilitate the discovery of new business opportunities and support the adoption of more targeted business models, such as personalised services, which enhance customer engagement and satisfaction.

"The competitive strength of enterprises in these markets is now increasingly measured by the amount, diversity, and quality of the data they control. Therefore, access to and effective use of data are crucial factors that determine the competitiveness and market power of digital enterprises," it said.

Meanwhile, Meta has said it disagrees with CCI's order and plans to appeal against it.