The Supreme Court on Friday upheld the Delhi High Court’s decision dismissing the challenge by WhatsApp against an order of the Competition Commission of India (CCI) directing an investigation into its privacy policy.
A Bench of Justices MR Shah and Sudhanshu Dhulia upheld the order for a CCI probe into allegations of abuse of dominant position by the Facebook-owned entity in connection with the 2021 privacy policy.
“CCI is an independent body, when proceedings are initiated by it for anti competitive practices, it cannot be challenged only highlighting jurisdiction. CCI cannot be restrained from probe into alleged violations of Competition Act. All contentions kept open. Any observations of the High Court in proceedings are to be treated as tentative and prima facie, and matter is to be considered on its own merits. SLPs stand dismissed,” the order reads.
In August, the Delhi High Court had refused to stay the probe ordered by the CCI last year. While doing so, it held that WhatsApp occupies a dominant position in the relevant product market and that there exists a strong lock-in effect which renders its users incapable of shifting to another platform despite dissatisfaction with the product.
The High Court had said that the 2021 policy was a substantially modified version of its 2016 policy since under the new terms, there is no “opt-out” option, the presence of which led the CCI to conclude that the 2016 Policy did not violate the Competition Act.
The High Court had also held that solely for the reason that the policy itself does not emanate out of Facebook, it cannot hide behind the fact that it is the direct and immediate beneficiary of the data sharing mechanism envisaged by the policies.
These circumstances necessitate the presence of Facebook as a proper party in the investigation related to the 2021 policy and the alleged anti-competitive practices they trigger, the judgment had stated.
Meta Platforms Incorporated, the newly-formed parent/holding company of both Facebook and WhatsApp, thus moved the present appeal before the Supreme Court.
Senior Advocate Kapil Sibal appearing for WhatsApp in today’s hearing raised grievance with how the probe could continue when the Constitution Bench is deciding the validity of its 2021 privacy policy.
” … how can they in the meantime probe while the issue of the privacy policy is pending? How is this proposition of law correct that the SLP before this court won’t have any bearing?”
Justice Shan then remarked that the probe cannot be stayed till January, when the Constitution Bench is scheduled next hear the privacy policy challenge.
Senior Advocate Mukul Rohatgi appearing for Meta and Facebook said the issue was that of jurisdiction.
Additional Solicitor General N Venkatraman appearing for CCI said that the social media company was using the data it was collecting from ads in a dominant way, resulting in possibbe abuse.
“The concentration of data with a particular company results in abuse … Policy is still intact and there’s concentration of data in one hand, this has nothing to do with (Article) 21.”
