NCLAT mandates users consent for WhtasApp data collection

The National Company Law Appellate Tribunal (NCLAT) on Monday clarified that its directions on privacy and consent in the WhatsApp case apply to user data collection and sharing for all non-WhatsApp purposes, including advertising and non-advertising, PTI reported.

The clarification came on an application filed by the Competition Commission of India (CCI) seeking clarity on an earlier NCLAT order. The tribunal said, “Appellant (WhatsApp and Meta) cannot assert unilateral or open-ended rights over user data.”

“We had clearly held that users must retain the right to decide what data is collected, for which purposes and for how long. Any non-essential collection or cross-use like advertising etc., can occur only with the concerned users' express and revocable consent,” the tribunal said.

NCLAT added that once users are given the option to opt in or opt out of data sharing at any stage-whether while using regular or optional features-their rights remain protected and the scope for exploitation is removed, an issue linked to WhatsApp’s 2021 privacy policy.

Allowing the CCI’s application, the tribunal clarified that “remedial directions contained in Paras 247.2.1 to Paras 247.2.4 of the Applicant's impugned order dated 18.11.2024 will apply to WhatsApp user data collection and sharing for all non-WhatsApp purposes, including non-advertising and advertising purposes,” said a two-member bench comprising Chairperson Justice Ashok Bhushan and Member Arun Baroka, PTI reported.

The tribunal also granted the platform three months to comply with the directions and make the required changes.

Earlier, on November 4, NCLAT had granted partial relief to WhatsApp by setting aside part of the CCI order that barred the platform from sharing data with Meta Platforms for advertising purposes for five years. However, it upheld a penalty of Rs 213 crore and confirmed that WhatsApp’s 2021 policy violated provisions of the Competition Act related to abuse of dominance and market denial.

The tribunal had also noted that cross-platform data sharing between WhatsApp and Meta strengthened Meta’s position in the display advertising market by creating entry barriers for rivals lacking access to similar data. At the same time, it held that a finding of breach under Section 4(2)(e) was not sustainable, as WhatsApp and Meta are distinct legal entities.