The Appellate Tribunal, NCLAT, on Monday clarified that its previous order concerning WhatsApp's privacy and consent safeguards also extends to the collection and sharing of user data for all non-WhatsApp purposes, which includes both non-advertising and advertising activities.
This clarification came as part of an order passed on an application moved by the Competition Commission of India (CCI), which sought confirmation regarding the scope of the NCLAT's earlier ruling.
Key rulings on user rights
The NCLAT bench, comprising Chairperson Justice Ashok Bhushan and Member Arun Baroka, emphasised that WhatsApp and Meta (the appellant) "cannot assert unilateral or open-ended rights over user data".
The tribunal reiterated its prior stance, stating:
"We had clearly held that 'users must retain the right to decide what data is collected, for which purposes and for how long. Any non-essential collection or cross-use like advertising etc. can occur only with the concerned users' express and revocable consent,'” said NCLAT.
Furthermore, the NCLAT noted that providing users with the option to opt in or opt out of data sharing at any stage, whether using regular or optional features, ensures that "their rights are protected for all times, and exploitation is removed, which has been an issue with the 2021 WhatsApp policy".
Remedial directions clarified
Based on this analysis, the NCLAT allowed the CCI's application, clarifying:
"It is clarified that 'remedial directions contained in Paras 247.2.1 to Paras 247.2.4 of the Applicant's impugned order dated 18.11.2024 will apply to WhatsApp user data collection and sharing for all non-WhatsApp purposes, including non-advertising and advertising purposes”.
The tribunal granted WhatsApp three months to comply with the directions by making the necessary changes.
Background of the NCLAT decision
The NCLAT's November 4 order had granted partial relief to WhatsApp by setting aside a section of the CCI's original ruling. In that original judgment, the NCLAT had:
- Upheld a Rs 213 crore penalty on the social media platform.
- Confirmed that WhatsApp's 2021 policy breached Section 4(2)(a)(i) and 4(2)(c) of the Competition Act, constituting an abuse of dominance and creating a situation of market denial.
- Initially set aside Para 247.1 of the CCI order while upholding Para 247.2. This led to an ambiguity where user consent was clearly required for non-advertising purposes, but not explicitly addressed for advertising purposes. This latest clarification addresses that gap.
In its 184-page order, the NCLAT had earlier concluded that cross-platform data sharing between WhatsApp and Meta enhanced Meta's advantage in the display advertising market, thus creating an entry barrier for rivals in digital advertising without equivalent access to WhatsApp data.
However, the tribunal had also ruled that the CCI's finding of a breach of Section 4(2)(e) was "not sustainable," stating that it could not be concluded that Meta had leveraged its dominance in one market (OTT messaging) to protect or extend dominance in another (online display advertising), given that WhatsApp and Meta are distinct legal entities.
The initial penalty of Rs 213.14 crore was imposed by the CCI in November of the previous year concerning the 2021 WhatsApp privacy policy update. Following a challenge by Meta Platforms and WhatsApp, the NCLAT had previously passed an interim order in January, staying the five-year ban on data-sharing practices between the two entities for advertising purposes.
ALSO READ: What '5201314' means? The Chinese number Indians searched most on Google this year
