Delhi High Court seeks response from CCI in WhatsApp, Facebook appeal

Delhi High Court seeks response from CCI in WhatsApp, Facebook appeal

A Division Bench of the Delhi High Court has issued notice to the Competition Commission of India (CCI) to reply on the appeals of Facebook and WhatsApp against a single judge order dismissing their pleas against the probe CCI ordered into the instant messaging app's new privacy policy.

The Division Bench comprising of Chief Justice D N Patel and Justice Jasmeet Singh issued notice to the CCI which had ordered the probe and sought its response by May 21.

Before the Single Judge, WhatsApp argued that CCI started 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. Facebook and WhatsApp had contended that when the Supreme Court and the Delhi High Court were looking into the privacy policy, then CCI ought not to have "jumped the gun" and intervened in the issue.

The Single Judge had said that though it would have been prudent for the CCI to await the outcome of petitions in the Supreme Court and the Delhi high court against WhatsApp's new privacy policy, not doing so would not make the regulator's order "perverse" or "wanting of jurisdiction".

The Single Judge, however, refused to interfere with the CCI order merely on the ground that the anti-trust authority should await the outcome of the pending cases before the Supreme Court and the High Court.

The CCI had contended before the single judge that it was not examining the alleged violation of individuals' privacy which was being looked into by the Supreme Court. According to the CCI, the new privacy policy of WhatsApp would lead to excessive data collection and "stalking" of consumers for targeted advertising to bring in more users and is, therefore, alleged abuse of dominant position.

The single Judge had contended that there was no question of jurisdictional error and stated that WhatsApp and Facebook's pleas challenging its decision were "incompetent and misconceived".

Facebook's stand that an investigation could have been ordered against it was also rejected.

WhatsApp and Facebook had challenged the CCI's March 24 order directing a probe into the new privacy policy. The CCI had held that the 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 CCI further took note of the "lock-in" effect of using an app as widely used as WhatsApp, and opined that the scope of sharing information may extend beyond the categories expressly mentioned in the policy. It had also contended that the data collected, which would include an individual's location, the kind of device used, their internet service provider, and whom they are conversing with, would lead to the creation of a customer profile and preference which would be monetised by way of targeted advertising and all this amounts to "stalking".

Such conduct, the CCI concluded appears to be in contravention of Section 4 of the Competition Act, which prohibits abuse of dominance.