The Competition Commission of India (CCI) has imposed a significant fine of ₹213.14 crore ($25.4 million) on Meta, citing its controversial 2021 privacy policy update for WhatsApp. This policy, which required users to share data across Meta's platforms, was deemed unfair and in violation of competition laws.

The 2021 WhatsApp Policy Controversy

In January 2021, WhatsApp introduced new terms of service and a revised privacy policy, sparking widespread backlash. Users were informed that they had to accept these new terms by February 8, 2021, to continue using the app. Unlike its 2016 policy, which gave users the option to opt out of data sharing, the 2021 update made sharing data with Meta companies mandatory.

This "take-it-or-leave-it" approach effectively forced compliance, limiting user autonomy and raising concerns about fairness and privacy.

Abuse of Dominance in India

According to the CCI, WhatsApp holds a dominant position in India’s market for over-the-top (OTT) messaging services, while Meta leads the country’s online display advertising market. The commission noted that WhatsApp’s policy exploited its dominance, leaving users with limited alternatives and pressuring them into agreement.

The CCI ruled that Meta-controlled WhatsApp abused its market power, using its vast user base to create unfair advantages. It further stated that the 2021 update facilitated anti-competitive practices by enabling Meta companies to leverage shared user data for purposes beyond WhatsApp’s services.

Restrictions on Data Sharing

The CCI has prohibited WhatsApp from sharing user data with other Meta companies for advertising or non-WhatsApp-related purposes for five years. The commission emphasized that sharing such data would harm competition by providing Meta an outsized advantage in the online advertising market.

Competitive Implications

The watchdog expressed concern that Meta’s access to extensive user data through WhatsApp created significant entry barriers for competitors. By unfairly bolstering Meta's dominance, the policy discouraged innovation and limited opportunities for smaller firms or new entrants in the digital advertising space.

“Sharing WhatsApp users' data with Meta companies for non-WhatsApp purposes creates an entry barrier for Meta’s rivals and denies market access to competitors in the display advertising market,” the CCI stated.

Broader Implications

This ruling highlights India's increasing regulatory scrutiny of tech giants and underscores the growing importance of fair competition and data privacy in the digital economy. For Meta, the decision serves as a critical reminder of the need to balance business practices with user rights and market fairness.