In January 2021, WhatsApp introduced a privacy policy update that expanded the scope of data collection and sharing with other Meta companies. The update, which is mandatory for Indian users but optional in the European Union due to stricter privacy laws, sparked a huge backlash, according to the Indian Express. Many users migrated to competing platforms such as Signal and Telegram, leading the Competition Commission of India (CCI) to launch an investigation into the matter, raising concerns about unfair practices and abuse of market power.
The controversy intensified when Meta and WhatsApp challenged the investigation in the Delhi High Court, arguing that the matter was already under judicial review. However, in 2022, the court dismissed their appeal because WhatsApp’s dominance and “lock-in effect” meant that users could not easily switch to alternative platforms despite their dissatisfaction.
Now, almost three years later, the CCI has concluded that the 2021 privacy policy update violated the Competition Act and imposed a penalty of Rs 213.14 crore (approximately $25.4 million) on Meta.
According to the CCI, the introduction of the “do or die” directive imposed an unfair playing field on users. The Commission also found that the sharing of WhatsApp user data with Meta companies created barriers to competitors in the display advertising market, preventing competitors from entering the market.
To address these issues, the CCI ordered several action measures. For the next five years, WhatsApp will be prohibited from sharing user data for advertising purposes unrelated to the messaging service.
Additionally, the platform will have to provide a detailed description of the type of data shared and its specific purpose. Indian users, including those who have already accepted the 2021 update, will also have to be provided with an opt-out option that will be prominently displayed in in-app notifications.
Meanwhile, Meta announced that it would appeal against the CCI ruling. The 2021 update should provide greater transparency around data collection and use while introducing optional business features. The company also reiterated that no users have been penalized for not accepting the policy and that WhatsApp remains an important platform for Indian businesses and government services.
The fine marks a significant regulatory action against Meta in one of its largest markets, highlighting increased scrutiny of how tech giants handle user data.
With more than 500 million users in India, WhatsApp’s dominance in messaging and advertising is now under intense scrutiny. Meta’s ability to circumvent these restrictions while maintaining user trust and market share will be closely watched.
