CCI Imposes ₹213.14 Crore Penalty on Meta Over WhatsApp’s 2021 Privacy Policy Update

The Competition Commission of India (CCI) has imposed a hefty fine of ₹213.14 crore (approximately $25.3 million) on Meta, accusing the company of abusing its dominant position in the market with WhatsApp’s controversial 2021 privacy policy update.

The investigation revealed that the update required users to share their data with Meta’s family of companies, including Facebook and Instagram, without providing an option to opt out. This, according to the CCI, violated provisions of the Competition Act, as it unfairly leveraged WhatsApp's market dominance to impose such data-sharing terms on users.

In addition to the fine, the CCI has mandated that WhatsApp stop sharing user data with Meta companies for advertising purposes for a period of five years. The ruling also prohibits WhatsApp from making data-sharing a compulsory requirement for users to access its services in India.

Further, WhatsApp has been directed to:

• Clearly disclose the types of data shared with Meta’s entities and the specific purposes for such sharing.

• Provide users with the ability to opt out of non-service-related data sharing, and ensure they can modify their preferences within the app.

• Extend these choices to all users, even those who had already accepted the updated policy in 2021.

The CCI’s investigation found that WhatsApp dominates India’s OTT (over-the-top) messaging market, while Meta leads the country’s online display advertising sector. The watchdog argued that WhatsApp's 2021 policy update imposed "unfair conditions" by forcing users into expanded data-sharing agreements without offering alternatives, taking advantage of its dominant position and the absence of other viable messaging platforms.

The CCI also noted that this data-sharing practice created barriers for competitors in the advertising market by restricting their access to user data, thereby reinforcing Meta's control in the sector.

The 2021 privacy policy had already sparked global concern, with regulators from various countries scrutinizing its impact on privacy and antitrust issues. In August 2024, a Brazilian court had also prohibited WhatsApp from sharing user data with Facebook and Instagram.

In response to the CCI's ruling, a Meta spokesperson announced plans to appeal the decision, defending the update as a choice for users and stating that it did not affect the privacy of personal messages. Meta also emphasized that no accounts were deleted or restricted due to the update.

The CCI initiated its investigation into WhatsApp’s privacy policy shortly after the update was rolled out in January 2021. Both Meta and WhatsApp had previously sought to halt the probe, arguing that privacy-related matters were already being addressed in the Delhi High Court and the Supreme Court. However, both the single-judge bench in 2021 and the division bench in 2022 dismissed these appeals, allowing the investigation to continue.

This penalty underscores the increasing regulatory scrutiny faced by digital platforms over their handling of consumer data and their market practices.