Big blow to WhatsApp! CCI orders probe into new privacy policy of WhatsApp

New Delhi, March 25: Taking action against the facebook-owned WhatsApp, the Competition Commission of India has directed an investigation against WhatsApp over the much controversial recent update of its privacy policy. CCI said in its order said, that WhatsApp breached antitrust laws in the guise of its policy update.

 

 

The order was issued by a CCI bench comprising Chairperson Ashok Kumar Gupta and members Sangeeta Verma and Bhagwant Singh Bishnoi. In its 21 pages order, Commission has directed the Director-General to initiate a probe against the company under the provisions of Section 26(1) of the Competition Act. Moreover, the commission has also directed the DG to complete the investigation and submit the investigation report within a period of 60 days from the receipt of this order.

 

CCI has taken this decision after observing that the privacy policy terms on sharing of personalised data with Facebook companies were "neither fully transparent nor based on the specific, voluntary consent of users." In the order, CCI said, "Commission is of the considered opinion that WhatsApp has prima facie contravened the provisions of Section 4 of the Act through its exploitative and exclusionary conduct, as detailed in this order, in the garb of policy update."

 

 

It should be noted, Section 4 of the Competition Act prohibits enterprises holding a dominant position in a relevant market from abusing such a position.

 

 

According to India’s competition watchdog CCI, in a world where data is gaining more importance, it is necessary to examine whether excessive data collection is getting in the way of creating a healthy competitive environment. “The Commission is examining the policy update from the perspective of competition lens in ascertaining as to whether such policy updates have any competition concerns which violate the provisions of Section 4 of the Act,” said the order.

 

 

The CCI pointed out the terms and conditions of Whatsapp are “unfair and unreasonable” for the WhatsApp users as it forces users to accept its take=it-or-leave-it policy without even providing much information to the users.

 

 

It added that such “consent” can’t be considered as a voluntary agreement for use of their data. The CCI said that the users have not been provided with the appropriate granular choices to object to or opt-out of specific data sharing terms, which prima facie appear to be unfair and unreasonable for the WhatsApp users.

 

 

The CCI also noted that users, as owners of their personalised data, are entitled to be informed about the extent, scope, and precise purpose of sharing such data by WhatsApp with other Facebook companies. “The purpose of such sharing appears to be beyond users’ reasonable and legitimate expectations regarding quality, security, and other relevant aspects of the service for which they register on WhatsApp,” said the order.

 

 

The CCI observed that “a thorough and detailed investigation is required to ascertain the full extent, scope, and impact of data sharing through involuntary consent of users”.

 

 

The Commission has clarified that the observations are preliminary in nature and will not amount to a final expression of opinion on the merits of the case. "The DG shall investigate without being swayed in any manner whatsoever by the observations made herein", the order added as a caveat.