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NCLAT defers hearing on ₹213 Cr penalty for Meta
Along with the penalty, CCI had prohibited WhatsApp from sharing user data with Meta for a period of five years.
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The National Company Law Appellate Tribunal (NCLAT) on Monday decided to wait and see if the central government notifies the Digital Personal Data Protection (DPDP) Rules before proceeding with the appeals filed by Meta and WhatsApp against a 2024 order of the Competition Commission of India (CCI) that imposed ₹213.14 crore penalty on Meta for abuse of dominance.
Along with the penalty, CCI had prohibited WhatsApp from sharing user data with Meta for a period of five years. Meta and WhatsApp challenged this order before NCLAT, which in January 2025 granted a partial stay on both the financial penalty and the restriction on data sharing.
A tribunal bench, led by NCLAT chairperson justice Ashok Bhushan, deferred the hearing after Meta submitted that the Centre was likely to notify the rules by the middle of the year, potentially impacting the case. The bench, also comprising technical member Arun Baroka, observed that the outcome of the DPDP Rules could have a bearing on the case and deemed it appropriate to delay proceedings to avoid any “overlap” with the forthcoming regulations.
“The whole issue might be covered by the new Rules. There is no harm in waiting until the next date. We can decide on the next date whether the appeal should be heard or not,” the tribunal remarked while adjourning the matter to May 13.
Senior counsel Kapil Sibal, representing Meta, said the Union government already released the draft DPDP Rules and the process of consultation was going on. He said that he could check with the ministry of electronics and information technology (Meity) and inform the bench of the date by which the Rules were likely to be notified.
Sibal’s request was opposed by CCI, whose counsel argued that the matter involved urgency and that a request for such deferment was unfair for it will allow Meta and WhatsApp to “enjoy the benefits” of NCLAT’s interim order that stayed the five-year ban imposed by CCI on data-sharing practices between WhatsApp and Meta for advertising purposes.
The dispute arises from a January 2021 notification issued by WhatsApp informing users about its revised terms of service and privacy policies. The new policy stated that effective February 8 the same year, users were required to accept all terms, including an expanded scope of data collection as well as mandatory data sharing with Meta companies, to continue using WhatsApp.
CCI took suo motu cognisance of the issue and concluded that the 2021 policy update constituted an imposition of “unfair condition” under the Companies Act since it compelled users to accept the data collection and sharing terms.
Last November, CCI imposed a penalty of ₹213.14 crore on Meta for abusing its dominant position, and prohibited WhatsApp from sharing user data collected on its platform with other Meta companies and Meta company products for advertising purposes for five years. NCLAT stayed the five-year ban this January while directing Meta to deposit 50% of the penalty amount.
