CCI slaps penalty of Rs 213 crore on Meta for abusing dominant position
Nov 19, 2024
Synopsis
India's Competition Commission has fined Meta approximately $26 million for abusing its dominant market position with WhatsApp's 2021 privacy policy. The regulator found that the policy update, which mandated data sharing with Meta companies, violated competition law by forcing users to accept expanded data collection terms without an opt-out option.
The Competition Commission of India (CCI) on Monday slapped a penalty of Rs 213.14 crore on Meta, the US-based firm which owns WhatsApp, for alleged abuse of its dominant position in the implementation of the messaging app’s 2021 privacy policy.
In an order, the antitrust regulator said that user data was collected and shared with other Meta companies in contravention of the competition law. It asked Meta and WhatsApp to implement certain behavioural remedies within a defined timeline, on top of issuing cease-and-desist directions for these entities.
“The Commission has concluded that the 2021 policy update by WhatsApp on a ‘take-it-or-leave-it’ basis constitutes an imposition of unfair condition 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,” the regulator said in a statement issued separately.
WhatsApp started notifying users from January 2021 about updates to its terms of service and privacy policies. And the in-app notification stated that, with effect from February 8 that year, users were required to accept the terms, including expanded scope of data collection as well as mandatory data sharing with Meta companies, to continue using WhatsApp.
Under the August 2016 privacy policy, WhatsApp users were given the option to decide whether they wanted to share their data with Facebook. However, with the 2021 policy update, WhatsApp made data sharing with Meta mandatory for all users, removing the earlier option to opt out.
“Given the network effects and lack of effective alternatives, the 2021 update forces users to comply, undermining their autonomy, and constitutes an abuse of Meta’s dominant position,” the CCI said.
The regulator also said that sharing of WhatsApp users’ data between Meta companies for purposes other than providing WhatsApp Service “creates an entry barrier for the rivals of Meta and thus, results in denial of market access in the display advertisement market”.
Meta, it added, “engaged in leveraging its dominant position in the OTT (over-the-top) messaging apps through smartphones to protect its position in the online display advertising market” in contravention of the competition law.
Remedial steps
Suggesting remedial measures, the regulator asked WhatsApp not to share user data with other Meta companies or Meta company products for advertising purposes, for five years.
For sharing of user data for non-advertising purposes, WhatsApp’s policy should include a detailed explanation, linking each type of data to its corresponding purpose, the CCI said.
Users must have the flexibility to opt out of non-service-related data sharing through in-app notifications and app settings, it said, adding that all future policy updates must also comply with these transparency and opt-out requirements.
[The Economic Times]
