WhatsApp sharing sensitive data with Facebook companies envisaged in its policy: Delhi HC

New Delhi [India], August 26 : A division bench of the Delhi High Court which on Thursday had dismissed the appeals of WhatsApp and Facebook challenging a Competition Commission of India (CCI) order calling for an investigation into the messaging apps' new privacy policy said that the 2021 policy, however, places its users in a "take-it-or-leave-it" situation, virtually forcing its users into agreement by providing a mirage of choice, and then sharing their sensitive data with Facebook companies envisaged in the policy.
The bench of Justice Satish Chander Sharma and Justice Subramonium Prasad in its detail judgement said that "the Court finds merit in the submission of the ASGs appeared for CCI that one of the key issues with the 2021 Policy is its propensity to share the data of its users with Facebook Inc., the parent company of WhatsApp. Solely for the reason that the policies itself do not emanate out of Facebook Inc., the Appellant cannot hide behind the fact that it is the direct and immediate beneficiary of the data sharing mechanism envisaged by the policies.
Court also stated in Judgement that It is not in dispute that WhatsApp occupies a dominant position in the relevant product market and that there exists a strong lock-in effect which renders its users incapable of shifting to another platform despite dissatisfaction with the product - as is exemplified by how, despite an increase in the downloads of Telegram and Signal when the 2021 Policy was announced, the number of users of WhatsApp have remained unchanged. By and large, to ensure retention of its user base and to prevent any other disruptive technology from entering the market, data is utilised by tech companies to customise and personalise their own platforms so that its user base remains hooked. When data concentration is seen through this prism, it does give meaning to the new adage that "data is the new oil", and, as noted in the CCI Order dated March 24, 2021, it raises competition concerns because it prima facie amounts to imposition of unfair terms and conditions upon its users, thereby violating Section 4(2)(a)(i) of the Act.
The Division bench was hearing the petitions of WhatsApp and Facebook challenging the single bench, which had dismissed Facebook and WhatsApp petitions against the CCI decision.
The single bench of the Delhi High Court on April 22, 2021, dismissed Facebook and WhatsApp pleas challenging a CCI order for an investigation into the messaging app's new privacy policy. The petitioners had challenged the March 24 order passed by CCI directing a probe into the new privacy policy and the probe should be completed within sixty days.
Facebook and WhatsApp said that since the issue of WhatsApp's privacy policy is being heard by the Supreme Court, and High Court, therefore, there was no requirement for CCI to order the probe.