NCLAT Halts CCI's WhatsApp Ban, Orders Meta to Pay Half of Rs 213 Crore Fine
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Synopsis
On January 23, NCLAT granted Meta a reprieve by suspending the CCI's five-year ban on WhatsApp, citing potential disruption to the platform's operations in India. The tribunal mandated Meta to pay half of the imposed Rs 213 crore fine within two weeks.
Key Takeaways
- NCLAT has temporarily lifted CCI's ban on WhatsApp.
- Meta must pay 50% of the Rs 213 crore fine.
- Concerns over data privacy could be addressed by new laws.
- WhatsApp has over 500 million users in India.
- The CCI began investigating in March 2021.
New Delhi, Jan 23 (NationPress) In a significant relief for Meta, led by Mark Zuckerberg, the National Company Law Appellate Tribunal (NCLAT) announced on Thursday that it has temporarily suspended the five-year prohibition enforced by the Competition Commission of India (CCI) against WhatsApp due to its data-sharing practices.
The bench of the NCLAT, presided over by Justice Ashok Bhushan, expressed concern that such a ban could severely impact WhatsApp's business framework in the nation, where the platform boasts over 500 million active users monthly.
The tribunal also instructed Meta to remit 50 percent of the imposed fine of Rs 213 crore within two weeks.
To date, the social media entity has paid 25 percent of this penalty.
Just last week, the NCLAT reserved its decision on a request from Meta and WhatsApp to suspend the CCI's ruling that levied a fine of Rs 213 crore for “abusing dominant position”.
The tribunal noted that the forthcoming data protection legislation in India might mitigate issues pertaining to data privacy.
WhatsApp’s 2021 Privacy Policy permits sharing user data with affiliated companies like Meta and Instagram without an option to opt out.
Earlier this month, Meta sought intervention from the NCLAT regarding the CCI's directive. In November of the previous year, the competition authority instructed WhatsApp not to share user data collected via its platform with other Meta products or firms for advertisement purposes for a five-year duration, alongside imposing a Rs 213.14 crore penalty for purportedly abusing its dominant market position.
Meta informed the NCLAT that the CCI's ruling has broad implications for the entire sector, hence necessitating an urgent hearing.
After the CCI directed WhatsApp to cease sharing user data with other Meta entities for a five-year span, the platform voiced its disagreement and indicated plans to appeal the decision.
The CCI initiated an investigation in March 2021 into WhatsApp's updated privacy policy which mandated data sharing with Facebook (now Meta) and its subsidiaries, alongside an expanded data collection scope.
