NCLAT stays CCI order on WhatsApp-Meta data sharing, penalty hearing in March

The National Company Law Appellate Tribunal (NCLAT) on Thursday stayed part of the Competition Commission of India (CCI) order in the WhatsApp case. The Tribunal has stayed CCI’s direction that WhatsApp will not share user data with Meta for ad reasons for five years. 

NCLAT also today directed that 50 percent of ₹ 213.14 crore penalty be deposited within 2 weeks. WhatsApp has already paid 25 percent of the penalty. 

NCLAT has now provided six weeks to complete pleadings and scheduled the next hearing for March 17.

It maybe recalled NCLAT had last Thursday admitted the appeals filed by Meta Platforms and WhatsApp challenging the ₹213.14 crore penalty imposed by the CCI over WhatsApp’s controversial 2021 privacy policy. 

Background: The case against WhatsApp’s 2021 privacy policy

In November 2024, the CCI imposed a ₹213.14 crore penalty on Meta and WhatsApp, citing abuse of dominant position in the instant messaging market. The regulator found that WhatsApp’s 2021 privacy policy update forced users to accept new terms that mandated data sharing with Meta’s other businesses (such as Facebook and Instagram), without offering a clear opt-out mechanism.

The CCI ruled that this was a ‘take-it-or-leave-it’ policy, coercing users to accept unfair terms to continue using the service. In addition to the monetary penalty, the regulator ordered WhatsApp to halt its data-sharing practices for the next five years and directed the company to offer users more transparent choices regarding their data.

Meta, however, has strongly opposed the CCI’s findings, arguing that the regulator has exceeded its jurisdiction by interfering in what is essentially a privacy-related matter, which should be decided under India’s data protection laws, not competition law.

Meta’s Argument: CCI prder ‘premature’ amid ongoing Supreme Court review

At last Thursday’s NCLAT hearing, Meta’s lawyers stressed that the privacy policy issue is already being reviewed by a Constitution Bench of the Supreme Court examining broader concerns around data privacy, consent, and WhatsApp’s business model in India.

Meta further contended that India’s new Digital Personal Data Protection Act (DPDPA), set to take full effect by mid-2025, will govern data-sharing practices moving forward. Any enforcement of the CCI’s penalty now, they argued, would prejudge the matter and interfere with the upcoming regulatory framework.

“The DPDPA will provide a structured mechanism for handling such privacy issues. Until the framework is fully operational, applying competition law to penalize WhatsApp is both excessive and unnecessary,” Meta’s legal team had last week submitted before the NCLAT.

Wider implications: A global regulatory battle for Meta

This case is being closely watched as it aligns with Meta’s global regulatory battles over data privacy and competition concerns. Across the EU, the US, and India, regulators have been tightening scrutiny on Big Tech’s data-sharing practices.

In India, this case is particularly significant because it tests the boundaries of competition law in regulating digital platforms. If upheld, the CCI’s order could set a precedent for future cases involving data-driven business models.