NCLAT to Decide on Meta's Appeal Against CCI's ₹213.14 Crore Penalty

NCLAT to Decide on Meta's Appeal Against CCI's ₹213.14 Crore Penalty

Senior Advocate Amit Sibal, representing Meta, argued before the National Company Law Appellate Tribunal (NCLAT) that the Competition Commission of India (CCI) findings against WhatsApp's 2021 privacy policy suffer from "seven major misses". The CCI had imposed a ₹213.14 crore penalty on Meta, alleging abuse of dominance.

Factual Background

In 2021, WhatsApp updated its privacy policy, sparking controversy and concerns about data sharing with Meta. The CCI investigated and found WhatsApp's "take-it-or-leave-it" approach to be unfair, violating the Competition Act, 2002.

Procedural Background

Meta and WhatsApp challenged the CCI's order before the NCLAT. In January 2025, the NCLAT stayed the penalty and the five-year data sharing ban, citing potential impact on WhatsApp's business model.

Issues

The primary issue is whether the CCI's findings against WhatsApp's 2021 privacy policy are valid.

Contentions of the Parties

Meta: Amit Sibal argued that the CCI's action was based on public misinformation, not facts. He claimed that the 2021 update did not expand WhatsApp's ability to share data with Meta beyond the 2016 policy.

CCI: The regulator found WhatsApp's privacy policy update to be an abuse of dominance, imposing unfair conditions on users and undermining autonomy.

Reasoning and Analysis

The CCI's findings seem to be based on a misunderstanding of WhatsApp's data sharing practices and the opt-out mechanism provided to users. The regulator's approach appears to be overly broad, failing to consider the pro-competitive effects of personalized advertising. Furthermore, the remedies imposed by the CCI seem disproportionate and unnecessary. The concept of expectations in inductive reasoning is relevant here.

According to Peter Gärdenfors, expectations play a crucial role in shaping our understanding of the world and informing our decisions. In this case, the CCI's expectations regarding WhatsApp's data sharing practices may have been influenced by public misinformation, leading to flawed findings

Relief Sought

Meta seeks to overturn the CCI's order, while the CCI defends its findings.

In this case Meta was represented by Senior Advocates Kapil Sibal, Mukul Rohatgi and Arun Kathpalia. Meanwhile CCI will be represented by Senior Advocate Balbir Singh on 18th Sept 2025.