NCLAT lifts WhatsApp data sharing ban, upholds Rs 213.14 cr fine on Meta

The National Company Law Appellate Tribunal (NCLAT) on Tuesday upheld the Rs 213.14 crore penalty imposed on Meta Platforms and WhatsApp by the Competition Commission of India (CCI) but set aside the watchdog’s five-year ban on data sharing between WhatsApp and other Meta entities.

The tribunal found that CCI had correctly established abuse of dominance under Section 4 of the Competition Act, noting that WhatsApp’s 2021 privacy policy required users to accept expanded data-sharing terms without genuine consent. However, it said the ban on data sharing ‘lacked rationale’ and was legally unjustified, according to a media report.

The CCI had, in November 2024, fined the platforms Rs 213.14 crore, holding that the 2021 policy unfairly strengthened the company’s position in digital advertising by leveraging WhatsApp’s dominance in the messaging market.

The case originated after the messaging app’s 2021 privacy update, which mandated users to share certain data with its parent company to continue using the app. The move had triggered global scrutiny over data privacy.

An NCLAT bench observed that restoring user consent and allowing opt-in or opt-out choices sufficiently addressed the issue of coercion, making a prolonged ban unnecessary.

The company said it was reviewing the written order but reiterated that the update “did not change the privacy of people’s personal messages, which remain end-to-end encrypted,” a spokesperson told Reuters.

The ruling offers partial relief for the company, which counts India as its largest market with nearly 850 million users across Facebook and WhatsApp.