Competition watchdog fines Meta $25.5 mn over WhatsApp privacy update

The Competition Commission of India (CCI) has slapped a Rs213.14 crore (about $25.5 million) penalty on Meta, the parent company of WhatsApp, for abusing its “dominant” position over the messaging platform’s controversial privacy policy update in 2021.

The anti-trust watchdog accused Meta, which is also the parent firm of Facebook and Instagram, of imposing unfair conditions on users and using its market dominance to suppress competition in India’s online display advertising market.

WhatsApp’s contentious privacy update in 2021 required users to agree to the condition of expanded data sharing with Meta-owned companies, such as Facebook and Instagram, if they wanted to continue to use the platform.

Unlike the 2016 policy, which allowed users to opt out of data sharing with Facebook, the 2021 update removed this choice entirely, the CCI noted.

Calling the policy “take-it-or-leave-it”, the CCI maintained that it violated the autonomy of users who had no choice but to accept.

This was in stark contrast to WhatsApp’s move to provide with that choice to users in European Union countries, given its stringent laws on privacy protection.

WhatsApp’s dominance in India’s over-the-top (OTT) messaging market prompted Meta to exploit this position to stifle competition by creating barriers in the advertising space, the CCI said.

In addition to the penalty, the CCI has ordered a series of corrective actions to curb Meta’s anti-competitive practices.

For five years, WhatsApp cannot share user data with Meta companies for advertising purposes, the watchdog ordered.

Moreover, the messaging platform is required to explain what data is shared and why, offer users an opt-out option for non-advertising purposes, and ensure this option is easily accessible in-app.

Meanwhile, Meta on Tuesday said it would challenge the order and claimed that the 2021 update “did not change the privacy of people’s personal messages and was offered as a choice for users at the time.”

“We also ensured no one would have their accounts deleted or lose functionality of the WhatsApp service because of this update,” The Press Trust of India reported, citing a Meta spokesperson.

“WhatsApp is able to do all of this because it offers services supported by Meta. We are committed to finding a path forward that allows us to continue providing the experiences that people and businesses have come to expect from us,” the spokesperson added.