NCLAT stays CCI’s 5-year ban on WhatsApp data sharing with Meta

The National Company Law Appellate Tribunal (NCLAT) on Thursday stayed the Competition Commission of India (CCI) order directing WhatsApp not to share user data with Meta or its products for five years.

A bench of Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka observed that the five-year ban could disrupt WhatsApp’s business model, which operates as a free platform.

“We are of the view that the ban of five years needs to be stayed,” the bench said.

The appellate tribunal also stayed the ₹213.14 crore penalty imposed by the CCI on Meta, subject to the company depositing 50% of the amount. A detailed copy of the NCLAT order is awaited.

The CCI found the update in violation of Section 4(2)(a)(i) of the Competition Act, concluding that it imposed unfair terms on WhatsApp’s 530 million Indian users. It also held that data-sharing practices between Meta entities created entry barriers for competitors in online display advertising, contravening Sections 4(2)(c) and 4(2)(e) of the Act.

The commission further issued a cease-and-desist order, barring WhatsApp from sharing user data with Meta companies for advertising purposes for five years.

It directed WhatsApp to clearly explain the type of user data shared with Meta entities and the corresponding purposes.

“The 2021 update did not change the privacy of people's personal messages and was offered as a choice for users at the time,” a Meta spokesperson said in November.

"We also ensured no one would have their accounts deleted or lose functionality of the WhatsApp service because of this update," the spokesperson added.