Disagreeing with the watchdog, Meta said on Tuesday that it plans to appeal the CCI’s order. “As a reminder, the 2021 update did not change the privacy of people’s personal messages and was offered as a choice for users at the time,” a Meta spokesperson said.
What is the penalty for?
The antitrust watchdog on Monday said Meta has abused its dominant position in the market, explaining that this fine relates to how WhatsApp’s 2021 privacy policy was implemented and how user data was collected and shared with other Meta companies.
The commission specifically highlighted two markets where WhatsApp was abusing its dominant position — OTT messaging apps through smartphones in India, and online display advertising in India.
According to the CCI order, “The 2021 policy update by WhatsApp on a ‘take it-or-leave-it’ basis constitutes an imposition of unfair conditions under the Act, as it compels all users to accept expanded data collection terms and sharing of data within Meta Group without any opt-out.”
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What is the case?
The CCI had begun a probe into Meta in March 2021 due to concerns regarding WhatsApp’s privacy policy update. This update was mandatory for users to accept and it expanded the scope of data collection and sharing between WhatsApp’s sister firms, including Facebook and Instagram.The investigation aimed to find out if the policy update was an abuse of WhatsApp’s dominant position in the Indian market. The CCI’s concerns were primarily centered around the following issues:
CCI’s major concerns with the update were:
– Users had to accept the policy in order to continue using WhatsApp, limiting their choice.
– The policy allowed WhatsApp to share user data with other Meta companies for advertising and other purposes
– The policy was not sufficiently clear about the extent of data collection and sharing
The backlash
The announcement of this update had sparked a global backlash. Scores of WhatsApp users in India had migrated to competitor platforms like Signal and Telegram, as many thought their data will be shared with Facebook, or their chats would no longer be encrypted.
As a result, WhatsApp had delayed the update from early 2021 to May. When the update was reintroduced, WhatsApp added clarifications, including an in-app banner to better explain the update. Company executives assured users that its changes were minor, that it cannot read users’ messages, and that its services were secure.
CCI’s suggestions
The CCI order directs the social media giant to implement behavioural remedies within a defined timeline to address the anti-competition issues.
WhatsApp has been asked to refrain from sharing user data with other applications, owned by Meta, for advertising purposes for a period of five years.
On sharing of WhatsApp user data for purposes other than advertising, the regulator said WhatsApp’s policy should include a detailed explanation of the user data shared with other Meta companies or Meta company products.
CCI said all users in India (including users who have accepted the 2021 update) must be given the choice to manage data sharing for purposes other than for providing WhatsApp services, by way of an opt-out option prominently through an in-app notification.
