[BREAKING] Delhi High Court refuses to set aside CCI order calling for DG investigation into WhatsApp privacy policy

The Delhi High Court today refused to set aside the Competition Commission of India (CCI) order calling for an investigation into allegations of abuse of dominance levelled against WhatsApp in relation to its privacy policy. (Facebook vs CCI) (WhatsApp vs CCI).The order was passed by a Single Judge Bench of Justice Navin Chawla opined that the order of investigation could not be quashed merely because the Commission did not await the outcome of the pending cases before the Supreme Court and High Court. "Respondent No 1 cannot be said to be bound to hold its hand..", the Court said as it noted that the challenge to the 2021 privacy policy was only by way of applications and it was not stated if the Supreme Court had taken cognizance of the issue or passed any order. .The Court concluded, "..merely because of the pendency of the above proceedings before the Supreme Court and before this Court, the respondent no. 1 cannot be said to be bound to necessarily hold its hands and not exercise the jurisdiction otherwise vested in it under the statute. Maybe, it would have been prudent for the respondent no.1 to have awaited the outcome of the above-referred petitions before the Supreme Court and before this Court, however, merely for its decision not to wait, the Impugned Order cannot be said to be without jurisdiction or so perverse so as to warrant to be quashed by this Court in exercise of its extra-ordinary jurisdiction.".The Court further recorded that WhatsApp, Facebook mounted an independent challenge to the Commission's order without moving an application before the Supreme Court and the High Court for clarification, and the same was not maintainable. .Facebook's stand that an investigation could have been ordered against it was also rejected. .Facebook and WhatsApp had moved the High Court earlier this month against the CCI order calling for a Director General (DG) probe to ascertain the full extent, scope and impact of data sharing through involuntary consent of users..WhatsApp argued that the anti-trust regulator "jumped the gun" by starting suo motu proceedings in relation to WhatsApp's privacy policy of 2021 when the issue was pending before two constitutional courts- the Supreme Court and the Delhi High Court..It was contended that privacy was a constitutional issue that could not be gone into by CCI. .CCI probe in relation to WhatsApp privacy policy a headline-grabbing endeavour: Harish Salve argues before Delhi High Court.A probe could not be directed against Facebook on the ground that it was a beneficiary of the policy, it was stated. The social media platform also claimed that the order did not meet the requirements of Section 26(1) of the Competition Act..CCI defended its order by clarifying that the issue before the regulator was only with respect to the anti-competitive aspect of the policy, and that there was no clash with the courts on issues of privacy..CCI was dealing with excessive data collection and the use and sharing of it in an anti-competitive context, it was said. .The Court noted that in the present case, the CCI had prima facie concluded that WhatsApp was dominant in the relevant market for Over-the-Top (OTT) messaging apps through smartphones in India and its policy raised anti-competitive issues. ."..due to lack of/restricted interoperability between platforms, the users may find it difficult to switch over to other applications except at a significant loss.there is opacity, vagueness, open-endedness and incomplete disclosures in the 2021 Update on vital information categories; concentration of data in WhatsApp and Facebook itself may raise competition concerns; data-sharing amounts to degradation of non-price parameters of competition.", the Court noted CCI's concerns. .In view of the above, the Court stated that it could not be said that CCI acted beyond its jurisdiction. .Even if some of the issues may substantively be in issue before the Supreme Court and the High Court, there could not be an inviolable rule that CCI would get divested of its jurisdiction in such cases, the Court added. .The Court said, "In the present case, the issue as to whether the 2016 Update/2021 Update announced by WhatsApp in any manner infringes upon the Right of Privacy of the users guaranteed under Article 21 of the Constitution of India is pending adjudication before the Supreme Court and this Court. The question regarding the 2016 Update/2021 Update not giving an option to opt-out is also an issue before the Supreme Court and this Court. However, the same cannot necessarily mean that during the pendency of those petitions, the respondent no.1 is completely denuded of the jurisdiction vested in it under the Competition Act, 2002 or that it must necessarily await the outcome of such proceedings. Therefore, it is not a question of lack of jurisdiction of the respondent no. 1, but rather one of prudence and discretion.".The challenge was accordingly dismissed. .Additional Solicitor General Aman Lekhi appeared for CCI. Senior Advocates Harish Salve, Mukul Rohatgi and Amit Sibal appeared for WhatsApp and Facebook..Read the order: