The National Company Law Appellate Tribunal on Thursday temporarily suspended a five-year data sharing ban between WhatsApp and owner Meta Platforms. The ruling comes as a major relief for the US tech giant which had warned its advertising business will be affected.
The ban, announced in November 2023, had been imposed by the Competition Commission of India (CCI) after a series of complaints and concerns regarding WhatsApp’s privacy policy updates, particularly its data-sharing practices with Meta entities.
The CCI found that WhatsApp’s policy changes in 2021 coerced users into accepting the new terms, threatening to limit their access to the app if they did not. Meta has maintained that these changes were merely intended to explain the functioning of optional business messaging features and did not expand its data collection or sharing practices.
Meta, which owns both Facebook and WhatsApp, had challenged the ban warning it may have to roll back some features. Meta also criticized the CCI for not having the “technical expertise” to understand the ramifications of its order.
On Thursday, the National Company Law Appellate Tribunal ordered a suspension of the data sharing ban while it continues to hear Meta’s challenge to the antitrust ruling.
The ban “may lead to a collapse” of WhatsApp’s business model, the tribunal noted.
“We welcome the NCLAT’s ruling and will evaluate next steps,” a Meta spokesperson stated following the decision. The CCI, however, has not yet responded publicly to the tribunal’s ruling. Should the watchdog choose to challenge the decision, it has the option to take the matter to the Supreme Court.
How WhatsApp came under CCI scanner
India is the biggest market for Meta where it has more than 350 million Facebook users and over 500 million people using WhatsApp.
The case first gained traction in 2021 amid scrutiny over WhatsApp’s controversial privacy policy update. The CCI had found that WhatsApp’s policy changes did not provide adequate transparency and forced users into accepting terms, which it deemed to be a violation of competition law. Under the CCI’s November ruling, WhatsApp was required to give users the option to decide whether they wanted their data to be shared with Meta entities, rather than having it automatically enabled.
Meta has argued the changes were only to provide information about how optional business messaging features work and did not expand its data collection and sharing ability.
The watchdog however ordered in November that WhatsApp must allow users to decide whether they want the messaging service to share data with Meta or not.
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