Meta, WhatsApp Move Supreme Court Against NCLAT Order Upholding ₹213 Crore CCI Penalty Over Privacy Policy

Meta, WhatsApp Move Supreme Court Against NCLAT Order Upholding ₹213 Crore CCI Penalty Over Privacy Policy

Introduction

Meta Platforms Inc. and its messaging subsidiary WhatsApp have approached the Supreme Court of India, challenging a decision of the National Company Law Appellate Tribunal which upheld a penalty of ₹213.14 crore imposed by the Competition Commission of India. The challenge arises from regulatory action taken against WhatsApp’s 2021 privacy policy, which mandated expanded data sharing with Meta group entities as a condition for continued use of the platform.

Factual Background

The controversy originates from WhatsApp’s 2021 update to its privacy policy, under which users were required to consent to broader sharing of personal data with other Meta companies. The policy applied on a “take-it-or-leave-it” basis, leaving users with no meaningful alternative if they wished to continue using the service. This triggered widespread concern that WhatsApp, given its entrenched position in the OTT messaging market, was imposing unfair conditions on users.

In November 2024, the CCI concluded that the policy amounted to abuse of dominance under the Competition Act, 2002. It held that WhatsApp had leveraged its market power to undermine user autonomy and imposed a penalty of ₹213.14 crore on Meta Platforms Inc. The regulator also issued remedial directions, including restrictions on mandatory data sharing, requirements for opt-in and opt-out mechanisms, and enhanced transparency obligations.

Procedural Background

Meta and WhatsApp challenged the CCI’s findings before the NCLAT. In January 2025, the appellate tribunal granted interim relief by staying both the monetary penalty and the five-year restriction on data sharing, noting that an outright ban could disrupt WhatsApp’s free-to-use business model.

In its final judgment delivered in November 2025, the NCLAT partly allowed the appeal. While it set aside the CCI’s conclusion that WhatsApp’s dominance in messaging was used to protect Meta’s position in online display advertising, it upheld the ₹213.14 crore penalty. Subsequently, on a clarification sought by the CCI, the NCLAT restored the remedial directions relating to user choice and granted WhatsApp three months to comply. Aggrieved by this outcome, Meta and WhatsApp have now moved the Supreme Court.

Issues

1. Whether the CCI was justified in holding that WhatsApp’s 2021 privacy policy constituted abuse of dominance.

2. Whether the imposition and continuation of the ₹213.14 crore penalty are legally sustainable.

3. Whether the remedial directions mandating user-choice safeguards strike a proportionate balance between competition law objectives and the platform’s business model.

Reasoning and Analysis

Before the NCLAT, Meta and WhatsApp argued that while regulatory oversight was permissible, an inflexible restriction on data sharing could impair the viability of a free digital service. The appellate tribunal accepted this contention in part by narrowing the scope of the CCI’s findings, but it maintained that the policy nevertheless imposed unfair conditions on users.

The restoration of remedial directions was premised on the need to preserve user autonomy and informed consent, even if the advertising-related dominance finding was diluted. The Supreme Court will now assess whether the competition authority and the appellate tribunal correctly balanced market power, consumer choice, and proportionality of remedies in a fast-evolving digital ecosystem.

Decision

The Supreme Court has taken cognisance of the challenge filed by Meta Platforms Inc. and WhatsApp against the NCLAT decision. The matter will involve scrutiny of the legality of the penalty and the continuing obligations imposed on WhatsApp in relation to data sharing and user choice. The outcome is likely to have significant implications for digital platforms, competition law enforcement, and data governance in India.