SUPREME COURT QUESTIONS META AND WHATSAPP ON PRIVACY POLICY AFFECTING INDIAN USERS:

The Supreme Court on Tuesday made strong observations against Meta Platforms and WhatsApp LLC over their data-sharing practices, signalling that it would not permit the exploitation of Indian users’ personal data. The Court was hearing appeals filed by Meta and WhatsApp challenging an order of the National Company Law Appellate Tribunal (NCLAT), which had upheld a penalty of ₹213.14 crore imposed by the Competition Commission of India (CCI) in connection with WhatsApp’s 2021 privacy policy update.

The CCI had found that WhatsApp, owing to its dominant position in India’s over-the-top messaging market, imposed a “take-it-or-leave-it” framework on users by making continued access to its services conditional upon acceptance of expanded data-sharing practices with other Meta group entities. This, according to the regulator, amounted to an abuse of dominance under the Competition Act, 2002. Along with the penalty, the CCI had issued remedial directions aimed at restoring meaningful user choice and limiting data-sharing for advertising purposes.

While the NCLAT later overturned certain findings of abuse of dominance and removed a five-year restriction on advertising-related data sharing, it nevertheless upheld the monetary penalty. Both Meta and WhatsApp appealed against this decision before the Supreme Court. The CCI also filed a cross-appeal, challenging the relief granted by the NCLAT that allowed data sharing for advertising.

A Bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice Vipul Pancholi heard the matter. Senior Advocates Mukul Rohatgi and Akhil Sibal, appearing for Meta and WhatsApp respectively, informed the Court that the penalty amount had already been deposited.

While agreeing to admit the appeals, the Chief Justice expressed serious reservations about the platforms’ privacy policy and the nature of user consent. The Bench questioned whether any real choice existed for users in a market where WhatsApp enjoys near-monopoly status. The Court observed that presenting acceptance of a complex privacy policy as voluntary was illusory when refusal effectively meant exclusion from an essential communication platform.

The Chief Justice further raised concerns about the intelligibility of the privacy policy for ordinary users, particularly those from economically or educationally disadvantaged backgrounds. The Court noted that policies drafted in dense legal language could not be said to represent informed consent, especially for users in rural or remote areas. The Bench characterised such practices as an improper appropriation of personal data and emphasised that constitutional rights to privacy could not be compromised for commercial gain.

The Court also expressed concern about the downstream commercial exploitation of user data, including targeted advertising based on behavioural analysis. Justice Bagchi highlighted that while the Digital Personal Data Protection Act, 2023 focuses on privacy, it does not adequately address the economic value of personal data or how such value is monetised. The Bench indicated its intention to examine how user data is shared, leveraged, and “rented out” within Meta’s advertising ecosystem to gain competitive advantage.

Solicitor General Tushar Mehta supported these concerns, pointing out that personal data is not only collected but also commercially exploited. The Bench observed that global regulatory frameworks, particularly in the European Union, recognise the economic value of data and subject such practices to closer scrutiny.

Faced with sustained questioning, Meta agreed to file a detailed affidavit explaining its data practices and safeguards. Accepting this submission, the Court adjourned the matter to next week and impleaded the Ministry of Electronics and Information Technology as a party to the proceedings. The Bench made it clear that until adequate assurances were provided, it would closely monitor any use or sharing of Indian users’ personal data.