CCI has not identified any conduct by Meta that denied market access to rivals: Meta Platforms tells NCLAT

In November, the CCI imposed a penalty of Rs 213.14 crore on Meta for unfair business ways with respect to the WhatsApp privacy policy update done in 2021.

Fair trade regulator CCI has "erroneously" defined the relevant market and has not identified any actual conduct by Meta, which has or would have denied market access to rivals, Meta Platforms told NCLAT on Monday.

Senior Advocate Amit Sibal, appearing for Meta, submitted that the Competition Commission of India (CCI)'s entire case is based on future conduct and hypothetical scenarios.

"This falls woefully short of the legal standard in Section 4(2)(c), which requires that for a finding of infringement, the conduct in question must have occurred or presently occurring," he said. Sibal further submitted that CCI has not demonstrated any actual effect of WhatsApp's 2021 Privacy Policy update on the alleged market for online display of advertising.

"The CCI has not shown how the limited sharing of data from certain optional features with Meta (for instance, optional business features like Click-to-WhatsApp Ads) has led to any impact on rivals in the market for online display advertising," Sibal submitted before the National Company Law Appellate Tribunal (NCLAT).

Moreover, CCI did not ask a single advertiser about the various services available in the advertising space and the level of substitutability between them.

"As a result, the CCI erroneously defined an artificially narrow relevant market of 'online display advertising'. This market does not include substitutable services such as online search advertising," he said.

NCLAT was hearing a petition by the tech giant, which challenged a penalty of Rs 213.14 crore on the social media major for unfair business ways with respect to the WhatsApp privacy policy update done in 2021.

It also does not include offline advertising, which is a viable competitor of online advertising thanks to recent technical advancements.

To arrive at this conclusion, the CCI discarded competitor testimony - such as from Google and Amazon - which showed the contrary.

Sibal will continue his arguments on Tuesday.

Senior advocate Arun Kathpalia, representing WhatsApp, concluded his arguments on Monday.

WhatsApp has submitted that CCI lacks jurisdiction to decide in a data safety issue, and there is no change in the data sharing policy of 2021 from the privacy policy of 2016.

The CCI will start its arguments on September 18 and 19 in this matter.

The appellate tribunal, in January this year, had stayed the five-year ban imposed by the competition watchdog CCI on data-sharing practices between WhatsApp and Meta for advertising purposes, offering a breather to the tech giant.

In November, the CCI imposed a penalty of Rs 213.14 crore on Meta for unfair business ways with respect to the WhatsApp privacy policy update done in 2021.

Meta Platforms and WhatsApp had challenged this order before the NCLAT, which is an appellate authority over the orders passed by the CCI.

In its 156-page order, the CCI had on November 18, 2024, directed Meta to cease and desist from anti-competitive practices.

According to that CCI order, Meta and WhatsApp have also been asked to implement certain behavioural remedies within a defined timeline to address the anti-competition issues.

The regulator called for implementing various remedial measures, including barring WhatsApp from sharing data collected on its platform with other Meta companies or Meta company products for advertising purposes for five years.

Among other directions, CCI had said that sharing of user data collected on WhatsApp with other Meta companies or Meta company products for purposes other than for providing WhatsApp services shall not be made a condition for users to access WhatsApp services in India.