By: Apurv Pratap Singh & Hrishav Kumar (Oxford Business Law Blog)
On March 24, 2021, the Competition Commission of India (‘CCI’) took suo moto cognizance and launched an investigation against WhatsApp and Facebook (‘Investigation Order’). This was a result of WhatsApp’s recent notification to its users of changes in its privacy policy and terms of services, which allowed WhatsApp to share user data with its parent company Facebook. The CCI formed a preliminary view that the ‘take it or leave it’ nature of WhatsApp’s updated privacy policy and terms of service appears to be an abuse of dominance and, as such, violates the Competition Act 2002 (‘Competition Act’). This landmark order is the first by which the Indian competition watchdog has, contrary to former practice, delved into an issue such as privacy, which ordinarily falls under other areas of law, such as constitutional law.
The CCI, among other things, observed that privacy is an important non-price parameter of competition over which market players compete and that the impugned data sharing between WhatsApp and Facebook results in the degradation of such non-price parameters. Interestingly, while examining WhatsApp’s privacy policy update of 2016, the CCI observed that the breach of the provisions of the Information Technology Act 2000 and the right to privacy do not fall within its purview. However, in the current proceedings, the CCI has reasoned that the 2016 update did not violate the Competition Act, as it allowed users to opt out of sharing information with Facebook whereas, in contrast, the 2021 update does not…
