Meta penalised $25.4 million in India over breaching privacy policy

India’s competition watchdog today imposed a penalty of Rs 213.14 crore (25.4 million USD) on Meta for allegedly abusing its dominant position relating to the messaging application’s 2021 privacy policy.
The case relates to how WhatsApp’s 2021 privacy policy and how user data was collected and shared with other Meta companies.
The Competition Commission of India (CCI) also directed Whatsapp to refrain from sharing user data for advertising purposes with other applications owned by Meta for five years.
The Competition Commission of India (CCI) launched a probe in March 2021 into WhatsApp’s privacy policy which allowed data sharing with Facebook and its units.
“Sharing of user data collected on WhatsApp with other Meta companies… for purposes other than for providing WhatsApp service shall not be made a condition for users to access WhatsApp Service in India,” the CCI said in its order.
The Commission delineated two relevant markets, the market for OTT messaging apps through smartphones in India and the market for online display advertising in India.
Meta group operating through WhatsApp was found to be dominant in the market for OTT messaging apps through smartphones in India. It was also found that Meta holds a leading position compared to its competitors in the online display advertising in India.
Starting from January 2021, WhatsApp notified users about updates to its terms of service and privacy policies. The in-app notification stated that, effective from February 8, 2021, users were required to accept these terms, including expanded scope of data collection as well as mandatory data-sharing with Meta companies, to continue using WhatsApp, the CCI said.
Under the previous privacy policy dated August 25, 2016, WhatsApp users were given the option to decide whether they wanted to share their data with Facebook, the Commission said.
However, with the policy update in 2021, WhatsApp made data sharing with Meta mandatory for all users, removing the earlier option to opt out. As a result, users had to accept the new terms, which include data sharing with Meta, in order to continue using the platform, it added.
“The Commission has concluded that the 2021 policy update by WhatsApp on a ‘take-it-or-leave-it’ basis constitutes an imposition of “unfair” condition under the Act as it compels all users to accept expanded data collection terms and sharing of data within Meta Group without any opt out,” according to the order.
“Given the network effects and lack of effective alternatives, the 2021 update forces users to comply, undermining their autonomy, and constitutes an abuse of Meta’s dominant position. Accordingly, the Commission finds that Meta (through WhatsApp) has contravened Section 4(2)(a)(i) of the Act,’ said the order.