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SC dismisses Meta, WhatsApp pleas over privacy policy probe
A bench of justices MR Shah and Sudhanshu Dhulia, while dismissing the appeals against the Delhi high court’s August order said CCI is an independent authority and can take up any violation of the Competition Act, 2002.
The Supreme Court on Friday dismissed pleas by WhatsApp and Meta (formerly Facebook) against the ongoing Competition Commission of India (CCI) probe against the former’s 2021 privacy policy, saying the investigation by the statutory body cannot be stayed nor can it be restrained from passing final orders.
A bench of justices MR Shah and Sudhanshu Dhulia, while dismissing the appeals against the Delhi high court’s August order said CCI is an independent authority and can take up any violation of the Competition Act, 2002.
It added that when CCI has prima facie opined that this is a case of violation of the 2002 Act , it cannot be argued that the anti-trust body does not have the jurisdiction to initiate proceedings.
“The precedent of the Supreme Court has held that the proceedings before the CCI are required to be completed at the earliest. In view of the above, the CCI cannot be restrained from proceeding further with the inquiry or investigation for the alleged violation of the Competition Act. All the contentions available to the parties are kept open,” said the court, referring to a 2010 order.
In its 2010 [CCI vs Steel Authority of India (SAIL)] decision, the SC held that “administrative function” of CCI would not be affected by the adjudicating of the same issue by the Supreme Court. The Court also held that the proceedings cannot be stalled and rather the issue should be decided expeditiously.
WhatsApp and Meta (formerly) Facebook had challenged an order of the division bench of the Delhi high court which allowed the CCI probe into the new privacy policy to continue.
In its judgment of August 25, the high court held that “WhatsApp’s new privacy policy shares sensitive data with Facebook (now Meta) and virtually forces users into agreement by providing a mirage of choice”.
“The 2021 [privacy] policy places users in a “take-it-or-leave-it” situation,” forcing them “into agreement by providing a mirage of choice, and then sharing their sensitive data with Facebook Companies envisaged in the policy”, the high court said, refusing to stop the probe.
Challenging the high court judgment, WhatsApp, represented by senior advocate Kapil Sibal told the Supreme Court on Friday, that a constitution bench of the apex court is already hearing matters on the validity of the privacy policy of WhatsApp, and that therefore, CCI must be stopped from ruling on the same issue.
He added that the constitution bench matter will now be taken up in January in view of a statement made by the Solicitor General that a new Data Protection Bill is going to be introduced in the winter session of the Parliament.
A five-judge Constitution bench, headed by justice KM Joseph, is hearing a plea challenging the validity of WhatsApp’s 2016 privacy policy that allowed the sharing of user data with Meta, then Facebook, and its other group companies for the purposes of advertising and marketing. This policy was challenged as being violative of the fundamental right to privacy.
On September 30, the apex court while hearing the matter had questioned the Centre over its delay in framing a law to protect the data privacy of its citizens despite right to privacy being declared a fundamental right by the top court in 2017. The Centre, however, said that the new law would be introduced in the coming winter session of Parliament.
Sibal requested the bench to either direct CCI to defer its proceedings or refrain from passing final orders till the top court adjudicates the matter pertaining to the privacy policy.
But the bench was indisposed. “How can we stay the investigation? We will not restrain them from proceeding in the matter. They function under a statute and we do not know if there is any connection between the two matters... CCI is an independent agency to consider the relevant provisions. Proceedings before CCI cannot be stalled,” responded the bench.
Appearing for CCI, additional solicitor general N Venkatraman complained that the companies have been trying incessantly to get the proceedings stayed by approaching every possible forum. The ASG contended that the constitution bench is examining WhatsApp’s policy on the anvil of privacy rights whereas CCI is looking into abuse of dominant status through sharing of data.
“We are a market regulator. We will continue investigating even if the court were to hold that their policy is invasion of privacy or otherwise. Abuse and dominance are what we are investigating into,” said Venkatraman.
CCI initiated suo moto proceedings into the new privacy policy on March 24, 2021 and ordered an inquiry . The order was upheld in April by a single judge of the high court and later by a division bench in August.
In July 2021, WhatsApp informed the Delhi high court that it has voluntarily agreed to put on hold its new privacy policy till the Data Protection Law is enacted and Parliament approves it, adding that users would not be compelled to accept the new security update.
The company pushed back the deadline for its contentious new privacy policy launched in January last year which allowed it to share some data about users’ interactions with business accounts with its parent company Facebook.
