NCLAT ruling quashing CCI’s Meta-WhatsApp data-sharing ban ‘landmark’, asserts competition watchdog's jurisdiction in data-related conduct

On November 4, the NCLAT upheld the Rs 213-crore-penalty imposed by CCI on Meta Platforms.

The National Company Law Appellate Tribunal’s (NCLAT) November 4 ruling that quashed CCI's data-sharing ban on Meta Platforms has effectively clarified that India’s competition regulator will have the authority to examine data-related conduct of companies, if such practices are found to be anti-competitive, lawyers and observers of the competition law have said.

According to legal experts, the judgement asserts that the Competition Commission of India (CCI) will retain its jurisdiction in data-related matters, even though data-abuse issues may fall within the remit of the Data Protection Authority.

"We are inclined to agree with the conclusions of CCI regarding the 2021 Policy that data privacy is a non-price factor in competition analysis as reduced privacy degrades service quality and creates competitive disadvantage for competitors," the NCLAT ruling had said.

According to Pranjal Prateek, Partner at Khaitan & Co, the NCLAT “squarely rejects” the argument that overlap with India’s data-protection framework ousts competition-law scrutiny.

“It treats competition and data-protection regimes as complementary and confirms that the CCI will retain jurisdiction over data-related conduct even after the Digital Personal Data Protection regime is fully operational,” Pranjal Prateek added.

The NCLAT ruling and Meta anti-trust case

On November 4, the NCLAT had upheld the Rs 213 crore penalty imposed by CCI on Meta Platforms and WhatsApp after concluding that the anti-trust regulator had correctly established an abuse of dominance. The tribunal agreed that WhatsApp’s 2021 privacy policy was unfair, and forcing users to accept expanded data-sharing terms without a meaningful opt-out constitutes as an abuse of dominance under the Competition Act, 2002.

However, the NCLAT had annulled the five-year ban which had been imposed by the CCI on data sharing between WhatsApp and other Meta entities over advertising. The tribunal describing the rationale for such a blanket prohibition as ‘missing altogether’, while maintaining the financial penalty on Meta Platforms.

The case stemmed from WhatsApp’s 2021 update, which expanded the scope of user data collection and enabled broader sharing of the data with other Meta entities. As accepting the update was a condition for continued use of the service, the CCI opened a suo-motu investigation and in November 2024 found that WhatsApp had abused its dominant position in OTT messaging by imposing “take-it-or-leave-it” terms, and used its advantage to tilt online display advertising markets.

The CCI had subsequently imposed a Rs 213.14 crore penalty and, crucially, a five-year ban on WhatsApp sharing user data with other Meta entities for advertising, alongside various transparency and policy-rewrite obligations.

‘Landmark ruling for data-related abuse’

For Indian competition law experts, the judgment was seen as a landmark in the treatment of data and privacy within abuse of dominance analysis.

The ruling cements the idea that in zero-price digital markets, degradation of privacy and opacity in data practices can amount to abuse, bringing Indian practice closer to emerging EU thinking on data-driven platforms, said experts.

The NCLAT is also making it clear that when the CCI tries to regulate a company's behavior across different markets - like Meta’s data sharing between WhatsApp, Instagram, and Facebook - it needs to have very strong evidence.

“This ruling establishes a nuanced legal precedent that will likely influence future competition cases by making it more difficult for the CCI to prove the structural violation of leveraging dominance across different digital markets, while simultaneously strengthening the regulator's authority to impose severe monetary penalties for direct, exploitative conduct,” said Anupam Shukla, Partner at Pioneer Legal.

Bhoomika Agarwal, Programme Manager at The Dialogue – a Delhi-based tech policy think tank said, “The judgment also brings into focus a likely tension with the proposed Digital Competition Bill, which envisions ex-ante restrictions on data use and cross-sharing. In contrast, the existing competition law framework, as interpreted by the NCLAT, favours a case-by-case, evidence-driven approach.”

“Unless these frameworks are harmonised, India risks creating a fragmented regulatory landscape marked by overlapping mandates and conflicting approaches to data governance,” she added.