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India Tribunal Lifts WhatsApp Data-Sharing Ban but Upholds Meta’s $25 Million Fine

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An Indian appeals tribunal has overturned a five-year ban preventing WhatsApp from sharing user data with other Meta-owned entities but upheld a $25.4 million fine, delivering a mixed verdict for the U.S. tech giant.

The National Company Law Appellate Tribunal (NCLAT) ruled on Tuesday that the Competition Commission of India’s (CCI) 2024 order lacked sufficient justification for restricting data sharing, calling the regulator’s rationale “missing altogether.” However, it agreed with the CCI’s finding that Meta had abused its market dominance by imposing unfair terms on users.

WhatsApp had challenged the CCI’s ban, warning it could have been forced to roll back certain features if the restriction remained. Meta, in turn, argued that the watchdog lacked the technical expertise to assess the implications of its decision.

The dispute dates back to 2021, when changes to WhatsApp’s privacy policy sparked widespread backlash in India. Regulators accused the company of pressuring users to accept new data-sharing terms or risk losing access to the platform.

A Meta spokesperson said the company is reviewing the tribunal’s written order and reiterated that the 2021 privacy update “did not change the privacy of people’s personal messages, which remain end-to-end encrypted.”

India is Meta’s largest market globally, with hundreds of millions of users across WhatsApp, Facebook, and Instagram — making the ruling a critical development for the company’s operations in the country.

Meta Warns India Antitrust Ruling Could Force Rollback of Features, Harm Business

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Meta has expressed concerns that a recent antitrust ruling by India’s Competition Commission (CCI) could compel the company to “roll back or pause” some of its features, potentially damaging its business in the country. This warning comes in response to a CCI directive that prohibits Meta’s WhatsApp messaging service from sharing user data with the parent company for advertising purposes.

The Antitrust Ruling and Its Implications

The CCI’s November directive found that Meta had abused its dominant position in India and coerced WhatsApp users into accepting a 2021 privacy policy change that allegedly expanded the company’s data collection and sharing practices. As a result, Meta was slapped with a $24.5 million fine and a five-year ban on sharing data between WhatsApp and Meta in India, where Meta has over 350 million Facebook users and more than 500 million WhatsApp users.

Meta has publicly defended its policy change, expressing disagreement with the CCI’s order. However, in its appeal, Meta highlighted the potential consequences of the ruling, which it claims would significantly impact its ability to deliver personalized ads on platforms like Facebook and Instagram. According to Meta’s filing, the ban on WhatsApp-to-Meta data sharing could prevent businesses, such as an Indian fashion company, from personalizing ads based on user interactions with WhatsApp. Meta has warned that this could force the company to “roll back or pause several features and products,” threatening the commercial viability of both WhatsApp and Meta in India.

Meta’s Concerns Over the Business Impact

Meta’s filing with the Indian appeals tribunal provides an in-depth look at the potential impacts of the CCI ruling. The company argues that the data-sharing ban would disrupt its ability to offer personalized advertisements and potentially hinder the company’s long-term revenue generation in India. While Meta has not specified the exact financial consequences, the company expressed concerns about the broader implications for its business operations in one of its largest markets.

Facebook India Online Services, Meta’s registered entity in the country responsible for selling advertising inventory, reported revenue of $351 million in 2023-24, marking its highest revenue in at least five years.

Global Challenges for Meta

This issue in India adds to Meta’s ongoing regulatory challenges worldwide. In 2021, WhatsApp was accused of violating EU laws by failing to adequately explain changes to its privacy policy. Although Meta later agreed to clarify these changes, the global scrutiny continues to affect the company.

The Indian antitrust investigation began in 2021, sparked by criticism over WhatsApp’s privacy policy changes. Meta argued that the changes were designed to provide clarity on optional business messaging features and did not expand data collection or sharing practices, but the CCI disagreed. The ruling mandates that WhatsApp allow users to decide whether or not they want to share their data with Meta, a significant shift from the previous policy that offered no opt-out option.

Meta’s Appeal Against the CCI’s Ruling

In its appeal, Meta has also criticized the CCI’s approach, stating that the regulator should have consulted with the company and WhatsApp before issuing directives to change its business practices. Meta argued that the CCI lacks the technical expertise necessary to fully understand the potential consequences of its decisions, especially as they pertain to the functioning of digital platforms.

Meta’s appeal will be heard by the Indian tribunal on Thursday, though the process could take weeks or months to resolve. In the meantime, the tribunal has the option to put the CCI directive on hold, potentially providing Meta some breathing room.

 

Samsung Challenges India’s Antitrust Probe, Citing Illegal Seizures

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Samsung Electronics has accused India’s Competition Commission (CCI) of unlawfully detaining its employees and seizing confidential data during a raid linked to an antitrust investigation involving Amazon and Flipkart, according to a legal filing. The case stems from a CCI probe that found Samsung and other smartphone companies colluded with the e-commerce giants to launch products exclusively online, breaching antitrust laws.

In an October 11 filing submitted to the High Court in Chandigarh, Samsung requested the quashing of CCI’s findings against it. The company argued that material seized during a 2022 raid at an Amazon vendor was obtained illegally. Samsung stated that three of its employees were detained during the raid, their phones confiscated, and confidential data copied without proper authority.

“The entire search exercise…is patently illegal, and any material collected thereunder should not be relied upon and should be promptly returned,” Samsung wrote in its 32-page petition. The filing also called for the CCI to be prohibited from using or relying on the unlawfully obtained data.

While Samsung secured an injunction from the High Court, temporarily halting the proceedings, the court has yet to decide on returning the seized data or barring the CCI from using it. The watchdog has faced similar injunctions from 22 other companies across India, prompting the CCI to seek a Supreme Court intervention to consolidate the challenges. The regulator claims the firms are attempting to derail its investigation.

The CCI probe centers on allegations that Amazon and Flipkart violated competition laws by favoring specific sellers on their platforms, disadvantaging competitors and brick-and-mortar retailers. Samsung, despite cooperating with the investigation as a third party, has been accused of enabling exclusivity in business practices by launching phones exclusively on Amazon and Flipkart. The watchdog labeled such practices as antithetical to free and fair competition.

Samsung, one of India’s leading smartphone makers with a 14% market share, denies any wrongdoing. The inclusion of smartphone manufacturers in the probe is expected to escalate legal and compliance risks for companies like Samsung.

The case underscores the growing tension between global tech firms and Indian regulators. Online sales have grown significantly in India, with 50% of phones sold online in 2022, compared to just 14.5% in 2013, according to Datum Intelligence. This shift has increased scrutiny on e-commerce platforms and their partnerships with tech firms.