The Competition Commission of India (CCI) has wrapped up a 3.5 year probe of Meta’s WhatsApp with a $25.4 million antitrust fine, primarily levied for the company’s internal user data sharing. Meta provided WhatsApp data to Facebook and other divisions for targeted advertising purposes, without properly informing users or giving them required alternatives.
Meta prohibited from app data sharing for five years
In addition to the fine, the CCI has ordered Meta to cease this element of cross-app user data sharing for five years. The order wraps up a probe that began in March 2021, after revelations that the previously privacy-focused WhatsApp was providing user personal data to Facebook for advertising caused a public outcry.
The penalty signals a new level of seriousness by the Indian government in taking on improper conduct in data sharing and gathering for advertising purposes, as it seeks to establish an EU-equivalent national data privacy law. The CCI also noted that users did not have an alternative way to access WhatsApp, forced to acquiesce to the app’s privacy policy and terms or cease using it.
India was not alone in seeing general tumult stemming from WhatsApp’s infamous privacy policy update of January 2021. The move rankled users that had already been on edge since Meta’s acquisition of the app in 2014, who had previously been told that it would be kept relatively siloed from the sprawling Facebook advertising network. That policy update asked WhatsApp users to accept some data sharing with Facebook, though Meta backed off from rolling it out in the EU out of concern that it would violate the General Data Protection Regulation. Meta had previously allowed WhatsApp users to opt out of sharing for a time after the acquisition, a feature that had been present since 2016.
Meta continues to see new antitrust issues develop
CCI specifically noted that Meta was dominant in two of India’s markets: internet-based messaging apps, and internet-based advertising. With about half a billion users WhatsApp is India’s most widely used messaging app, but Meta Messenger is also thought to have over 100 million users in the country (a number that exceeds the total population of many other nations).
The Indian government has moved to regulate big tech companies more tightly as of late, convening a panel to establish a new Digital Competition Bill to supplement its existing anti-competition laws. That bill remains in draft form after being proposed in a February report, but as it stands is very comparable to Europe’s Digital Markets Act (DMA). Larger companies would face stronger regulations, including fines of up to 10% of global annual turnover, and the bill is facing major pushback from big tech lobbyists (Meta included). This pressure appears to have kept the bill from being tabled in 2024, and while observers believe some form of it will inevitably pass it may well be withdrawn and significantly revised to accommodate some of this criticism.
Meta continues to take on a barrage of penalties from around the world, recently being handed a $841 million fine from the European Commission over integrating Facebook Marketplace with Facebook without properly informing users of the data sharing or obtaining their consent. That ruling included an anti-competition element as the Commission found that Meta had a dominant position in social media advertising and had the ability to impose unfair conditions on Marketplace users. The big tech firms seem happy to maintain a relative equilibrium of absorbing these fines even as they come from new quarters, however, as they rarely pose a serious threat to their financial health; Meta’s revenue was up to $134 billion in 2023, despite some struggles with Facebook use, and it is estimated to make about $10 billion across Europe and $5 billion in India.
India’s situation with the Digital Competition Bill reflects the tightrope the country is walking between courting tech companies with its large and connected population, and also keeping them in line with regulation that seeks parity with various EU laws established over the past decade. The country has developed numerous financial incentives aimed at big tech and has moved aggressively to position itself as a tech manufacturing center for companies looking to decouple from China, but has also been particularly tough on social media platforms in terms of both their data sharing practices and content moderation policies. The IT minister has recently called for tougher regulations on “uncontrolled” speech and vulgar content on social media platforms, and lawmakers have previously placed or attempted to place restrictions on “slanderous” content primarily aimed at curbing criticism of government officials. Some international observers regard the internet speech climate there as “illiberal,” something that has created serious friction with mostly US-based companies that would have to substantially change their operations to cater to the country’s terms.
