NCLAT Aligns Findings with Judgment in WhatsApp Data Sharing Case

Tribunal Clarifies Data Sharing Principles, Emphasizing User Choice and Transparency

In a significant judgment, the National Company Law Appellate Tribunal (NCLAT) has issued a clarification aligning the findings and the operative part of its earlier judgment regarding WhatsApp's data sharing practices. The Tribunal emphasized the core principle of restoring user choice and transparency in WhatsApp's data sharing policy, particularly concerning advertising and non-advertising purposes.

The case, "WhatsApp LLC v. Competition Commission of India," revolved around the data sharing practices introduced in WhatsApp's 2021 Privacy Policy. The NCLAT found that the policy imposed unfair and discriminatory conditions on users by mandating acceptance of expansive data sharing terms without offering an opt-out option. This was deemed a violation of the Competition Act, 2002, as it restricted market access for competitors and enhanced Meta's advantage in the display advertising market.

The Tribunal upheld the remedial directions requiring WhatsApp to not make its usage conditional on data sharing for non-WhatsApp purposes and to provide users with an opt-out mechanism. However, the five-year ban on data sharing for advertising purposes was set aside, as the Tribunal found it redundant once user choice was ensured.

The NCLAT clarified that the remedial directions would apply to both advertising and non-advertising purposes, ensuring comprehensive user choice and transparency. The Tribunal noted that any non-essential data collection or cross-use could occur only with the user's express and revocable consent, thereby removing exploitation and restoring user choice.

WhatsApp and Meta opposed the clarification, arguing that it imposed additional obligations beyond the judgment. However, the Tribunal rejected these claims, stating that the clarification merely aligned the operative part with the findings and did not introduce new remedies.

The Tribunal granted WhatsApp three months to comply with the clarified directions, acknowledging the complexity and time required to implement such changes. This decision underscores the Tribunal's commitment to upholding user rights and promoting fair competition.

Bottom Line:

Competition Law - Clarification issued to align findings with the operative part of the judgment, emphasizing user choice and transparency in WhatsApp's data sharing policy for advertising and non-advertising purposes.

Statutory provision(s): Competition Act, 2002 - Sections 4(2)(a)(i), 4(2)(c), 53(O)(2)(f), 152 CPC.

WhatsApp LLC v. Competition Commission of India, (NCLAT)(Principal Bench: New Delhi) : Law Finder Doc Id # 2822187