Khushi Bajpai
Published on: 26 August, 2022 at 18:40 IST
According to the Delhi High Court’s ruling in WhatsApp LLC vs. Competition Commission of India & Anr, WhatsApp’s 2021 privacy policy effectively forces its users to accept by giving them the illusion of a choice before sharing their sensitive data with Facebook.
According to a division bench composed of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad, WhatsApp holds a dominant position in the market for the relevant product and there is a significant lock-in effect that prevents users from switching to another platform even if they are dissatisfied with the product.
This was exemplified by how, despite an increase in the downloads of Telegram, this was demonstrated by the fact that, after the 2021 policy was published, more people downloaded Telegram and Signal, but WhatsApp user numbers remained constant, according to the Court.
The Court held,
“In general, tech corporations use data to tailor and personalise their own platforms so that their userbase remains hooked in order to assure retention of its user base and to stop any other disruptive technology from entering the market.
The phrase “data is the new oil” takes on new significance when viewed through this prism, and as highlighted in the CCI Order dated 24.03.2021, it raises issues about competition because it appears to be imposing unfair terms and conditions on its customers, in violation of Section 4(2)(a) (i) of the Competition Act.”
Since there is no “opt-out” option under the new terms, the Competition Commission of India (CCI), which came to the conclusion that the 2016 Policy did not violate the Competition Act, declared that the 2021 policy was a significantly changed version of its 2016 policy.
The comments were stated in the judgement denying appeals by WhatsApp and its parent company Facebook against a single-decision judge’s that refused to halt an investigation into the privacy policy authorised by the CCI in March 2021.
The judges rejected Facebook’s justification that it shouldn’t be the subject of a thorough and detailed probe since it is a separate and distinct legal entity from WhatsApp.
The Court ruled that Facebook cannot hide behind the fact that it is the direct and immediate beneficiary of the data sharing mechanism contemplated by the policies simply because the policy itself does not originate from Facebook.
According to the Court, these conditions make Facebook a necessary party in the investigation into the 2021 policy and the alleged anti-competitive activities it engenders.
The Bench further declared that the outcome of the cases now being heard by the Delhi High Court and the Supreme Court will not have any bearing on the CCI’s enquiry.
“In the event that the Supreme Court maintains the 2021 Policy, CCI can undoubtedly consider whether or not the Act’s provisions have been broken. If the Supreme Court rejects the 2021 Policy, the CCI will still be able to look into any Act violations that may have occurred while the case is pending before the Supreme Court and the 2021 Policy was in effect. Since the CCI is the market regulator, it cannot be argued that it lacks the jurisdiction to look into either situation.”
In response to WhatsApp’s and Facebook’s query on the CCI’s and the Constitutional courts’ overlap in jurisdiction, the Court said,
“Both have quite different operational spheres. The 2021 Policy is not being examined by this Court or the Supreme Court through the lens of competition law.”
The Court came to the conclusion that the single-judge’s decision is well-justified and free of any merit or substance that would justify interference.
For WhatsApp, senior attorneys Harish Salve, Tejas Karia, Shashank Mishra, Supritha Prodaturi, and Shashank Mishra all made an appearance.
Senior Attorney Mukul Rohatgi, together with Attorneys Sweta Shroff Chopra, Gauhar Mirza, and Nitika Dwivedi, represented Facebook in court.
For Meta Platforms Inc., attorneys Binsy Susan, Anjali Kumar, Shyamal Anand, and Vishesh Sharma appeared.
For Facebook India, senior attorney Parag Tripathi appeared alongside attorneys Ajit Warrier, Yaman Verma, Swati Aggarwal, and Mishika Bajpai.
Advocates V Chandrashekara Bharathi, Amritha Chandramouli, S Ram Narayan, Samar Bansal, Madhav Gupta, Vedant Kapur, Monica Benjamin, and Anu Sura appeared for CCI together with Additional Solicitors General N Venkataraman and Balbir Singh.
Other respondents were represented by attorneys Varun Pathak, Mitali Daryani, Yash Karunakaran, and Vani Kaushik.