India's chief competition regulator, the Competition Commission of India (CCI), has imposed a monetary penalty of Rs. 213.14 crore (approx US$ 25.4 Mn) on Meta (formerly Facebook) for anti-competitive practices related to its 2021 privacy policy update for WhatsApp.
The CCI found that Meta holds a dominant position in both the OTT messaging apps and online display advertising markets in India.
The 2021 privacy policy update forced users to accept expanded data collection and sharing terms without an opt-out option, which the CCI deemed as imposing unfair conditions.
Meta is prohibited from sharing user data collected on WhatsApp with other Meta companies for advertising purposes for the next five years. WhatsApp must provide users with an opt-out option for data sharing and ensure that future policy updates comply with these requirements.
Meta and WhatsApp are required to implement specific behavioral changes within a set timeframe to address the issues arising from the policy update.
Further, as regards sharing of data between Meta companies, the Commission has concluded that (a) 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, in contravention of the provisions of Section 4(2)(c) of the Act; and (b) Meta has engaged in leveraging its dominant position in the OTT messaging apps through smartphones to protect its position in the online display advertising market and the same is in contravention of Section 4(2)(e) of the Act.
In view of the anti-competitive harm elaborated in this order and for the purpose of addressing such harm, the OPs are further directed to implement the following directions:
- WhatsApp will not share user data collected on its platform with other Meta Companies or Meta Company Products for advertising purposes, for a period of 5 (five) years from the date of receipt of this order. After expiry of the said period, the directions at para 6.2 (except para 6.2.1) will apply mutatis mutandis in respect of such sharing of data for advertising purposes.
- With respect to sharing of WhatsApp user data for purposes other than advertising:WhatsApp’s policy should include a detailed explanation of the user data shared with other Meta Companies or Meta Company Products. This explanation should specify the purpose of data sharing, linking each type of data to its corresponding purpose.
- Sharing of user data collected on WhatsApp with other Meta Companies or Meta Company Products for purposes other than for providing WhatsApp services shall not be made a condition for users to access WhatsApp Service in India.
- In respect of sharing of WhatsApp user data for purposes other than for providing WhatsApp Services, all users in India (including users who have accepted 2021 update) will be provided with:
- the choice to manage such data sharing by way of an opt-out option prominently through an in-app notification; and
- the option to review and modify their choice with respect to such sharing of data through a prominent tab in settings of WhatsApp application.
- All future policy updates shall also comply with these requirements.
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