WhatsApp’s privacy policy: Why CCI fined Meta Rs 213 cr and what it means for users

Meta has responded by saying that it disagrees with the CCI bid and plans connected appealing it. “…the 2021 update did not alteration the privateness of people’s idiosyncratic messages and was offered arsenic a prime for users astatine the time. We besides ensured nary 1 would person their accounts deleted oregon suffer functionality of the WhatsApp work due to the fact that of this update,” the institution said successful a statement.

What is the privateness argumentation update successful question?

From January 2021 onwards, WhatsApp users successful India started receiving an in-app notification asking them to hold to the platform’s revised privateness argumentation successful 1 month’s time.

The main alteration successful the privacy policy was this: “Going forward, businesses tin take to person unafraid hosting services from our genitor institution Facebook to assistance negociate their communications with their customers connected WhatsApp.”

In simpler words, users had to hold to fto businesses usage Facebook-hosted services successful bid to store and negociate their WhatsApp chats with customers. This meant that erstwhile a idiosyncratic texts a concern connected WhatsApp, Facebook could grip that connection connected behalf of the business.

And portion Facebook said that it volition not automatically usage these chats to amusement users personalised ads, the respective businesses volition beryllium capable to bash so.

WhatsApp’s updated privateness argumentation sparked further contention due to the fact that it made users aware, for the archetypal time, astir the grade of meta information that it really collects, including accusation similar artillery level and awesome strength.

However, the portion that has been scrutinised by the CCI successful its bid is the company’s regularisation that users who don’t hold to the updated privateness argumentation would not beryllium capable to usage the level entirely.

After sizeable backlash, WhatsApp pushed the deadline for accepting its updated privateness argumentation to May 2021.

How did the substance travel earlier CCI?

In March 2021, the CCI took suo moto cognisance and launched a probe into the platform’s revised privateness policy. Based connected publically disposable worldly arsenic good arsenic complaints filed by an idiosyncratic named Prachi Kohli and Delhi-based integer rights advocacy radical Internet Freedom Foundation (IFF), the CCI recovered that the argumentation alteration had prima facie violated Section 4 of the Competition Act, 2002.

“WhatsApp’s behaviour of imposing its Privacy Policy puts unfair/discriminatory conditions upon its idiosyncratic base, since determination was nary effectual consent from the users for the Privacy Policy. This behaviour of WhatsApp is abusive of its ascendant position, and has a nonstop nexus to the beardown web effects enjoyed by WhatsApp,” IFF submitted to CCI.

In an effort to quash the CCI investigation, WhatsApp and Meta filed pleas earlier the Delhi High Court. They argued that the regulator had been hasty successful initiating the proceedings. However, the Delhi High Court dismissed the companies’ pleas.

Challenging the Delhi High Court order, WhatsApp and Meta moved the Supreme Court which besides dismissed their pleas and allowed the CCI probe to continue. Furthermore, the apex tribunal ordered the messaging app to instrumentality retired paper advertisements informing users that they bash not person to judge its 2021 privateness argumentation update.

On what grounds has CCI fined Meta?

Competition regulators typically request to place the applicable marketplace earlier assessing whether a institution has dominance of that market. In this case, the CCI delineated 2 applicable markets, namely: the marketplace for OTT messaging apps done smartphones successful India; and the marketplace for online show advertizing successful India.

However, it held that WhatsApp is lone ascendant successful India’s marketplace of OTT messaging apps.

“Considering the comparative fiscal resources and Daily Active Users (DAUs) and Monthly Active Users (MAUs) of the OPs and the competing apps successful the applicable market, nonstop web effects, the beardown lock-in effects, lack of countervailing buying power, and power implicit immense information acting arsenic barriers to marketplace entry, the DG has recovered Meta radical to beryllium ascendant successful the marketplace for Over-The-Top (OTT) messaging apps done smartphones successful India done WhatsApp,” the CCI bid reads.

In response, WhatsApp outright contested that it operates successful the marketplace for OTT messaging apps and asserted that it is really portion of “the wide and highly competitory marketplace for idiosyncratic attention.” It further argued that rival apps specified arsenic Signal and Telegram saw an summation successful idiosyncratic engagement during a WhatsApp outage, which demonstrated that the level was substitutable.

However, the CCI rejected this statement and said, “Users prosecute with WhatsApp, Facebook, Netflix, X (formerly Twitter), etc., for chiseled purposes i.e., communication, societal interaction, entertainment, micro-blogging, etc. Therefore, they cannot beryllium considered interchangeable oregon substitutable solely based connected the user’s attention.”

Since marketplace dominance unsocial is not illegal, the CCI examined and recovered that WhatsApp had abused its ascendant position.

“Meta’s immense fiscal resources let it to outspend its competitors successful areas specified arsenic probe and development, marketing, and acquisitions. This gives Meta a competitory edge, enabling it to connection amended services, heighten idiosyncratic experiences, and support its market-leading presumption successful OTT messaging with platforms similar WhatsApp and Facebook Messenger,” the CCI notes successful its order.

By sharing WhatsApp users’ information with Meta’s different subsidiaries, the regulator besides recovered that the tech elephantine created an introduction obstruction that prevented its rivals from showing online ads to users.

What happens now?

To code WhatsApp’s anti-competitive practices, CCI has ordered the institution to not stock idiosyncratic information with different Meta-owned services for the adjacent 5 years. From 2029 onwards, WhatsApp users successful India indispensable beryllium fixed a mode to opt retired of specified information sharing done an in-app notification.

The level has been further directed to fto users reappraisal and modify their prime done a abstracted tab successful the app’s Settings.

Going forward, WhatsApp has besides been directed to supply elaborate explanations specifying what information is being shared with different Meta platforms and for what reasons.