The National Company Law Appellate Tribunal (NCLAT) has upheld the Competition Commission of India’s (CCI) directive allowing WhatsApp users to opt out of data sharing under the platform’s 2021 privacy policy.

A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka partially stayed the CCI’s order, observing:

"We are of the prima facie view that the ban of five years imposed in paragraph 247.1 needs to be stayed. However, the directions in paragraphs 247.2 and 247.3 need not be stayed and must be complied with. The only interim relief granted is staying the direction in paragraph 247.1 imposing a five-year ban.”

The upheld portions of the CCI order include the following obligations for Meta and WhatsApp:

1. Transparency in Data Sharing: WhatsApp must clearly explain what user data is shared with Meta entities, specify the purpose, and link each data type to its intended use.
2. No Forced Data Sharing: Data sharing for purposes beyond WhatsApp services cannot be mandatory for users in India.

Additionally, WhatsApp is required to:

• Offer an opt-out option for such data sharing via an in-app notification.
• Enable users to review and modify their preferences through a prominent tab in the app’s settings.
• Ensure that future policy updates comply with these requirements.

The NCLAT stayed the CCI’s direction prohibiting WhatsApp from sharing data with Meta or its other products for five years. It also stayed the ₹213.14 crore penalty imposed on Meta, conditional upon depositing 50% of the amount.

The penalty and directions stemmed from a CCI investigation in November 2024, which concluded that Meta had abused its dominant position through WhatsApp’s 2021 privacy policy.

Jurisdictional Challenge

During the appeal, Senior Advocates Kapil Sibal and Mukul Rohatgi, representing Meta and WhatsApp, argued that the CCI exceeded its jurisdiction by intervening in WhatsApp’s privacy policy, which is currently under review by a five-judge Constitution Bench of the Supreme Court.

The NCLAT rejected this contention, affirming the CCI’s authority to investigate. It referred to the Supreme Court’s October 2022 order permitting the CCI to proceed with its inquiry, stating:

"The initiation of the proceeding was not interfered with. However, the final order by the CCI must be tested on its own merits."

WhatsApp further contended that the CCI’s order might become redundant with the implementation of the Digital Personal Data Protection Act, 2023. The NCLAT acknowledged this, allowing both parties to seek modifications to the interim order once the new law comes into force.

The case has been scheduled for a final hearing on March 17, 2025.

Representation

• WhatsApp: Senior Advocates Mukul Rohatgi and Arun Kathpalia, along with a team of advocates.
• Meta: Senior Advocate Kapil Sibal and team.
• CCI: Advocates Samar Bansal, Manu Chaturvedi, and others.
• Internet Freedom Foundation: Advocates Abir Roy, Vivek Pandey, and team.