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The Division Bench of Chief Justice DN Patel & Justice Jasmeet Singh has issued notice in an appeal against dismissal of petition filed by Facebook & Whatsapp challenging the CCI’s order for probe against Whatsapp’s new privacy policy. 

Senior Advocate Mr Harish Salve representing Whatsapp submitted that an investigation had been sought against Whatsapp by the Competition Commission of India (“CCI”). 

Senior Advocate Mr Mukul Rohatgi submitted that he appeared for Facebook & had been roped in because he was the father of Whatsapp. 

The appeal was filed against the order dated April 22, 2021 passed by Single Bench of Justice Navin Chawla wherein, Whatsapp’s & Facebook’s appeal against the order dated March 24, 2021 passed by the CCI in  Re: Updated Terms of Service and Privacy Policy for WhatsApp Users (Suo Moto Case No. 01 of 2021)  vide which the Commission ordered a probe into Whatsapp updated privacy policy for breaching Competition Law was dismissed.

The High Court noted that CCI’s order could not be quashed merely because it did not await the outcome of the cases pending before the Supreme Court & High court. The court said that it did not see any merits in the petitions of Facebook & Whatsapp to interdict the investigation directed by the CCI.

The investigation ordered u/s 26(1) of the Competition Act, 2002 came against the backdrop of registration of a Suo Moto case by CCI after various media reports reporting of WhatsApp Inc’s updated privacy policy & terms of service as per which WhatsApp users were mandatorily required to accept the terms & conditions to retain their WhatsApp account information. 

With regards to Whatsapp’s policy CCI observed that, “It appears that consent to sharing and integration of user data with other Facebook Companies for a range of purposes including marketing and advertising, has been made a precondition for availing WhatsApp service.”

The Commission also opined that the ‘take-it-or-leave-it’ nature of privacy policy and terms of service of WhatsApp and the information sharing stipulations mentioned therein, merited a detailed investigation in view of the market position and market power enjoyed by WhatsApp. It further took note of Whatsapp’s submission that the 2021 Update did not expand WhatsApp’s ability to share data with Facebook and the said update intended to provide users with further transparency about how WhatsApp collected, used and shared data & observed that the veracity of such claims would be examined during the investigation by the DG.

“The Commission is of the considered opinion that WhatsApp has prima facie contravened the provisions of Section 4 of the Act through its exploitative and exclusionary conduct, as detailed in this order, in the garb of policy update. A thorough and detailed investigation is required to ascertain the full extent, scope and impact of data sharing through involuntary consent of users.”, the Commission further observed.

Case Title: Whatsapp LLC v. Competition Commission of India & Anr & Facebook Inc v Competition Commission of India