Law tribunal grants partial stay on WhatsApp-Meta data sharing ban
The National Company Law Appellate Tribunal (NCLAT) on Thursday issued a partial interim stay on the Competition Commission of India’s (CCI) November 2024 order against WhatsApp which directed the instant messaging app not to share user data collected on its platform with its other businesses of holding company Meta.
The tribunal has allowed WhatsApp to collect and share user data with Meta platforms and products, but strictly for advertising purposes only.
The CCI had previously raised objections over WhatsApp’s privacy policy, particularly its handling of user data for both advertising and non-advertising purposes. In its detailed order, the CCI had imposed a five-year ban on certain practices of WhatsApp. The CCI had also imposed a Rs 213 crore penalty on WhatsApp.
“The ban of five years which was imposed in paragraph 247.1 may lead to the collapse of the business model which has been followed by WhatsApp LLC. It is also relevant to notice that WhatsApp is providing WhatsApp services to its users free of cost. We have also noticed that the Supreme Court has not granted an interim order staying the 2021 privacy policy and Digital Personal Data Protection Act 2023 has also been passed and is likely to be enforced which may cover all issues pertaining to data protection and data sharing,” NCLAT said in its order.
However, the tribunal has clarified that all other directions issued by the CCI, including payment of at least 50 per cent of the 231.4 crore penalty imposed on WhatsApp, will have to be implemented. WhatsApp will have to submit the 50 per cent penalty amount within 2 weeks.
Furthermore, the NCLAT has held that the directions regarding display of complete information about the “purpose of data sharing, linking each type of data to its corresponding purpose,” will have to be shared by WhatsApp.
The tribunal also stated that users must be given the choice to opt out of sharing user data for non-advertising purposes. The case will be heard further by the NCLAT on March 17, 2025.
