The Supreme Court on Friday refused to restrain the Competition Commission of India (CCI) from probing the 2021 privacy policy of WhatsApp.
Dismissing the appeal filed by its parent company Meta, which challenged the Delhi High Court judgment refusing to stay the probe, a two-judge bench presided by Justice M R Shah said the Commission is an independent authority to look into violation of The Competition Act, 2002 and that its proceedings cannot be said as being without jurisdiction.
The bench added that proceedings before the Commission have to be required to be completed at the earliest.
Appearing for Meta, Senior Advocate Kapil Sibal pointed out that a constitution bench of the court was seized of petitions challenging the WhatsApp policy. The matter was last heard on September 29 and the court has fixed it for hearing next in January 2023, he said.
Sibal contended that the CCI order says the policy “prima facie appears to be unfair to users” and added that the Commission cannot decide on the policy.
However, Additional Solicitor General N Venkataraman, representing the CCI, said it was only looking into concerns about abuse of dominant position and was not examining any constitutional provision.
“We are a market regulator. We are examining if there is abuse of dominance by their privacy policy. Data is being shared by WhatsApp. Threafter, they advertise on the basis of that,” he said adding that “concentration of data may result in abuse”.
Sibal said the Commission should defer taking a final decision during the pendency of the matter before the SC constitution bench but the court said the CCI is an independent body and the pendency or proceedings will not affect its work.
On August 25, the Delhi High Court had dismissed petitions against the probe, saying that the policy update placed the messaging app users in a “take-it-or-leave-it” situation, virtually forcing them into agreement by providing a mirage of choice.
The court had said that WhatsApp occupies a dominant position in the market and has a strong lock-in effect, which renders its users incapable of shifting to another platform despite dissatisfaction. It said the same is exemplified by the fact that despite an increase in the downloads of Telegram and Signal when the 2021 policy was announced, the number of WhatsApp users has remained unchanged.
It had said that to ensure retention of its user base and to prevent any other disruptive technology from entering the market, data is utilised by tech companies to customise and personalise their own platforms so that its user base remains hooked.
While ordering an investigation, the CCI last year had come to a prima facie conclusion that the conduct of WhatsApp in “sharing of users’ personalised data with other Facebook companies, in a manner that is neither fully transparent nor based on voluntary and specific user consent” appears unfair to the users. A single bench of the Delhi High Court on April 22, 2021 had dismissed the petitions filed by WhatsApp and Facebook against the CCI order.
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