CCI imposes ₹213.14 crore fine on Meta over 2021 WhatsApp privacy policy

The watchdog concluded that the 2021 policy update by WhatsApp on a "take-it-or-leave-it" basis constitutes an imposition of unfair conditions.

The Competition Commission of India (CCI) on Monday fined social media giant Meta of ₹213.14 crore over the 2021 WhatsApp privacy policy update.

In January 2021, WhatsApp notified users about updates to its terms of service and privacy policies.(AFP file photo)

The CCI has said that sharing of user data collected on WhatsApp with other Meta companies or products for purposes other than providing WhatsApp services shall not be made a precondition for users to access the WhatsApp service in India, PTI reported.

"Meta Group operating through WhatsApp was found to be dominant in the market for OTT messaging apps through smartphones in India. Furthermore, it was also found that Meta holds a leading position compared to its competitors in online display advertising in India," CCI said in a release.

In January 2021, WhatsApp notified users about updates to its terms of service and privacy policies. The in-app notification, effective from February 8, 2021, stated that users were required to accept these terms, including the expanded scope of data collection as well as mandatory data sharing with Meta companies, to continue using the instant messaging application, PTI reported.

In the previous privacy policy, users had the option to decide whether they wanted to share their data with Facebook or not.

"However, with the latest policy update in 2021, WhatsApp made data sharing with Meta mandatory for all users, removing the earlier option to opt out. As a result, users had to accept the new terms, which include data sharing with Meta, to continue using the platform," it added.

The watchdog concluded that the 2021 policy update by WhatsApp on a "take-it-or-leave-it" basis constitutes an imposition of unfair conditions under the Competition Act.

"Given the network effects and lack of effective alternatives, the 2021 update forces users to comply, undermining their autonomy, and constitutes an abuse of Meta's dominant position. Accordingly, the Commission finds that Meta (through WhatsApp) has contravened Section 4(2)(a)(i) of the Act," it said.

Further, CCI said that sharing WhatsApp users' data between Meta companies for purposes other than providing WhatsApp Service creates an entry barrier for the rivals of Meta.

With inputs from PTI