WhatsApp required to follow CCI order on giving users greater say in data sharing with Meta companies: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has clarified that WhatsApp is required to comply with Competition Commission of India (CCI)'s directions to give users greater control over whether their data is shared with other Meta companies [WhatsApp Vs Competition Commission of India]..A bench of chairperson Justice Ashok Bhushan and Technical Member Arun Baroka made the clarification after hearing an application moved by CCI in relation to NCLAT's recent judgment that set aside the competition regulator's 5-year ban on WhatsApp sharing user data with Meta group companies for advertising purposes.In its November 4 decision, the NCLAT had also set aside certain remedial directions issued by the CCI. The directives mandated that sharing of user data collected with other Meta companies or Meta company products shall not be made a condition for users to access WhatsApp in India. It was also directed that users should have a choice to op-out of such data sharing and a further option to review and modify their choice. The CCI had also ordered that WhatsApp’s policy should include a detailed explanation of the user data shared with other Meta companies or Meta company products, particularly the purpose of data sharing and linking each type of data to its corresponding purpose..In a subsequent application, the CCI argued that these safeguards had also been set aside despite NCLAT judgment's express inclination to uphold them. Both WhatsApp and Meta opposed the application, stating that users already have a choice to not use advertising features. They also argued that the application amounted to review.Today, NCLAT rejected the arguments questioning its jurisdiction."We are not fettered to review our own decision as per the Competition Act, if the present case of seeking clarification is found to be review in the guise of clarification," it said..On merits, it opined that last month's judgment unambiguously stated that user choice must be upheld."While dealing with directions of five-year ban, we had noted in our findings that once users have been given option to freely decide to opt in or opt out, as in other reliefs, this direction becomes redundant," the appellate tribunal added.Further, NLCAT said that the implication of setting aside the CCI safeguards would be that WhatsApp will get an exception from providing any explanation for the data shared for advertising purposes. The bench clarified that it was not the intention of the ruling."It would give go by to the core principle to remove exploitation of the users by restoring user choice. And it will not give the users a choice to decide what data is collected, for which purposes, and for how long. It will also give a go by to the principle that non-essential collection or cross-use (like advertising etc.) can occur only with the concerned user's express and revocable consent," NLCAT said in today's order..Thus, it concluded that the operative part of the ruling was not in sync with the findings, and restored CCI's remedial directions to "WhatsApp user data collection and sharing for all non-WhatsApp purposes, including non-advertising and advertising purposes” "Once users are provided optionality at any stage to opt in or opt out of data sharing – whether using regular features or optional features - their rights are protected for all times and there is a removal of exploitation, which has been the issue in 2021 WhatsApp policy," it said.On a request, the NCLAT granted WhatsApp three months to comply with the directions for bringing about necessary changes at their end. .In November 2024, the CCI had imposed a ₹213.14 crore penalty on Meta, finding that WhatsApp’s 2021 privacy policy update amounted to abuse of dominance. The regulator concluded that the “take-it-or-leave-it” approach imposed unfair conditions on users, undermined autonomy and violated provisions of the Competition Act, 2002.The CCI directed WhatsApp not to share user data with Meta or its affiliates for five years and further required the platform to specify the purposes of every category of data collected and prohibit making data sharing a precondition for accessing its services in India.WhatsApp and Meta challenged the order before the NCLAT. In January 2025, the NCLAT stayed both the penalty and the five-year data sharing ban, observing that such a ban could “lead to the collapse of the business model of WhatsApp LLC since the platform is free.”It partially ruled in favour of WhatsApp last month. NCLAT set aside the CCI finding that Meta engaged in leveraging its dominant position in the OTT messaging app sector to protect its position in the online display advertising market. The other portions of the order, including the ₹213.14 crore penalty, were upheld..Senior Advocates Mukul Rohatgi and Arun Kathpalia with advocates Yaman Verma, Shashank Mishra, Aisha Khan, Shivek Endlaw, Aditya Dhupar, Vedika Rathore and Devanshi Singh appeared for WhatsApp.Advocates Samar Bansal, Manu Chaturvedi, Vedint Kapur, Devika Singh Roy Chowdhary, Ahmed Jamal Siddiqui, Kshitiz Kishor Rai and Madhav Tripathi appeared for CCI.Senior Advocate Kapil Sibal with advocates Naval Chopra, Supritha Prodaturi, Akshi Rastogi, Parinita Kare, Ritika Bansal, Raagini Agarwal, Anupama Reddy Eleti and Aparajita Jamwal appeared for Meta..[Read Order].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.