Meta Faces Roadblocks in India After Antitrust Ruling, Warns of Feature Rollbacks

Meta, the parent company of Facebook, has expressed concerns over potential disruptions to its services in India following a recent antitrust ruling by the country’s Competition Commission of India (CCI). According to court documents reviewed by Reuters, the U.S.-based company stated it might need to “roll back or pause” certain features in its popular WhatsApp messaging app due to the directive, which bars data sharing between WhatsApp and Meta for targeted advertising.

The CCI’s November order found that Meta abused its dominant market position by coercing users to accept a controversial 2021 privacy policy update that allegedly increased data collection practices. In response, the watchdog imposed a $24.5 million fine on Meta and implemented a five-year ban on sharing WhatsApp user data with Meta’s other platforms, including Facebook and Instagram.

India remains a critical market for Meta, with over 500 million users on WhatsApp and more than 350 million Facebook users. The directive could significantly impact the company’s business model in the region. Meta’s court filing outlines its concerns, stating that the ban could hinder its ability to offer personalized advertisements — a key revenue driver.

According to the filing, Meta highlighted a specific example to demonstrate the ruling’s effect, stating that an Indian fashion business may no longer be able to personalize ads on Facebook or Instagram based on customer interactions via WhatsApp. This limitation could disrupt the company’s advertising ecosystem, which heavily relies on cross-platform data integration.

Meta’s Pushback Against the CCI

Publicly, Meta has defended its privacy policy changes, maintaining that they were necessary to explain how business messaging features work. However, in its appeal to the Indian tribunal, the company took a more critical stance, challenging the CCI’s approach and its understanding of the technological implications of the ruling.

Related: Meta Faces April Trial Over FTC Antitrust Allegations

“The Commission does not have the necessary technical expertise and knowledge to understand the ramifications of the remedies,” Meta stated in its nearly 2,000-page submission to the tribunal, according to a Reuters review.

Meta further argued that the CCI should have engaged in consultations with the company before issuing its directives. The tech giant emphasized that the data-sharing ban could impact the commercial viability of its platforms in India, though it did not quantify the financial consequences.

The Broader Implications for Meta

The Indian appeals tribunal is set to hear Meta’s plea on Thursday. While the case could take several months to resolve, the tribunal has the authority to temporarily suspend the CCI’s directive in the interim. Meta’s registered entity responsible for selling ad inventory in India reported a revenue of $351 million for the 2023-24 fiscal year, marking a record high for the company in the country.

The challenges in India add to Meta’s global regulatory struggles. In 2021, the European Union accused WhatsApp of failing to clearly communicate privacy policy changes, prompting the platform to improve its transparency for EU users.

In the Indian case, the CCI took issue with the lack of an opt-out option for users who did not wish to share their data with Meta. The regulator concluded that WhatsApp users were effectively forced to accept the terms or lose access to the service. The CCI has now mandated that WhatsApp offer users the ability to decide whether their data can be shared with Meta.

Meta’s court filing emphasized that the restrictions on data sharing could undermine its advertising business. “Under its widest interpretation, implementing the remedy will likely require Meta to roll back or pause several features and products,” the company noted in its submission.

Neither Meta nor the CCI has responded to media inquiries regarding the ongoing case, according to Reuters.

A Growing Privacy Debate

India’s scrutiny of Meta’s data practices reflects a broader global debate over how tech giants handle user information. The controversy surrounding WhatsApp’s 2021 privacy update sparked widespread backlash in India, prompting the CCI to launch its investigation.

Meta continues to maintain that the privacy changes were introduced to provide greater clarity about optional business messaging features, not to expand data-sharing capabilities. However, the CCI disagreed, arguing that the updated policy placed undue pressure on users to consent to data sharing.

Source: Reuters