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NCLAT pauses WhatsApp data sharing ban, orders Meta to deposit 50% of fine

The CCI, in November 2024, had prohibited WhatsApp from sharing user data with other Meta entities for advertising purposes, citing anti-competitive practices. It had also imposed a penalty of ₹213.14 crore on Meta for abusing its dominant position.

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The National Company Law Appellate Tribunal (NCLAT) has temporarily stayed a five-year ban imposed by the Competition Commission of India (CCI) on data-sharing practices between WhatsApp and its parent company, Meta, for advertising purposes. The decision offers temporary relief to the tech giant, which had challenged the CCI's directive.

The CCI, in November 2024, had prohibited WhatsApp from sharing user data with other Meta entities for advertising purposes, citing anti-competitive practices. It had also imposed a penalty of ₹213.14 crore on Meta for abusing its dominant position. The NCLAT has stayed the penalty, subject to Meta depositing 50% of the amount, after accounting for 25% already paid, within two weeks.

The tribunal observed that the five-year ban could potentially dismantle the platforms' existing business model, which offers free services to users. It noted that the 2021 privacy policy, which formed the crux of the CCI’s concerns, has not been stayed by the Supreme Court. Furthermore, the tribunal highlighted the introduction of the Digital Personal Data Protection Act, 2023, which may address the issues raised in the CCI order.

"We are of the prima facie view that the ban of five years imposed...needs to be stayed," the tribunal stated. It scheduled the next hearing for 17 March. Meta welcomed the NCLAT's decision, stating that it would evaluate its next steps. 

National Company Law Appellate TribunalThe regulator directed Meta and WhatsApp to implement behavioural remedies, including barring data sharing with other Meta products for non-WhatsApp services for five years.

The case continues to underscore the evolving regulatory landscape for digital platforms in India, with Meta and WhatsApp awaiting the tribunal's final verdict.

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