The National Company Law Appellate Tribunal on Thursday provisionally suspended a five-year data sharing restriction between WhatsApp and the owner of Meta Platforms. The verdict brings a considerable ease to the US tech giant, which had warned its advertising business would be impacted.
The data-sharing prohibition on WhatsApp had been declared in November 2023 by the Competition Commission of India (CCI). The ban, declared in November 2023, had been thrust by the CCI after a series of complaints and concerns regarding WhatsApp’s privacy policy updates, specifically its data-sharing practices with Meta platforms.
The CCI discovered that WhatsApp’s policy updates in 2021 forced users into accepting the new terms, threatening to restrict their access to the app if they did not. Meta has stated that these changes were only aimed to explain the operation of optional business messaging features and did not extend its data collection or sharing policies.
Meta, which owns both Facebook and WhatsApp, had confronted the ban alerts, which state it may have to take back some features. Meta also condemned the CCI for not having the “technical expertise” to understand the consequences of its order.
On Thursday, the National Company Law Appellate Tribunal ordered a suspension of the data sharing restrictions while it continues to hear Meta’s confrontation with the antitrust judgement.
The restraint may lead to a collapse” of WhatsApp’s business model, the tribunal pointed out.
“We welcome the NCLAT’s verdict and will consider next steps,” a Meta spokesperson said after the decision. The CCI has not yet responded publicly to the tribunal’s judgement.
Should the watchdog choose to confront the verdict, it has the choice to take the matter to the Supreme Court.
India is the largest market for Meta, where it has more than 350 million Facebook users and over 500 million people using WhatsApp. The case first gained momentum in 2021 in the middle of an evaluation over WhatsApp’s controversial privacy policy changes.
The CCI had discovered that WhatsApp’s policy changes did not provide sufficient transparency and thrust users into accepting terms, which seemed like a violation of competition law.
Under the CCI’s November judgement, WhatsApp was required to give users the option to decide whether they wanted their data to be shared with Meta entities, rather than having it automatically enabled.
Meta has stated that the changes were only to provide information about how optional business messaging features work and did not expand its data collection and sharing ability.
The CCI ordered in November that WhatsApp must allow users to decide whether they want the messaging service to share data with Meta or not.
