Meta Wins Temporary Relief in WhatsApp Data Sharing Dispute in India

In a temporary reprieve for Meta Platforms, India’s National Company Law Appellate Tribunal (NCLAT) has suspended a five-year ban on data sharing between WhatsApp and its parent company. The suspension, according to Reuters, offers relief to the U.S.-based tech giant, which had expressed concerns about the impact of the ban on its advertising business and overall operations in India.

Meta had challenged the November directive from the Competition Commission of India (CCI), which prohibited WhatsApp from sharing user data with other Meta entities for targeted advertising. Meta argued that the CCI lacked the “technical expertise” to fully understand the implications of its ruling and warned that the order could force the company to scale back or pause features integral to its services. According to Reuters, Meta had cautioned the tribunal that the ban “may lead to a collapse” of WhatsApp’s business model, which relies on data-driven personalization.

The NCLAT’s decision to temporarily lift the ban comes as the tribunal continues to hear Meta’s appeal against the CCI’s antitrust decision. This development is particularly significant given Meta’s vast user base in India, which includes over 500 million WhatsApp users and more than 350 million Facebook users.

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

Meta has previously highlighted the potential ramifications of the data-sharing restrictions, explaining that features like personalized ads on Facebook and Instagram—based on user interactions on WhatsApp—might need to be rolled back. Such features are seen as vital tools for businesses, including small enterprises like Indian fashion brands, that rely on targeted advertising to reach their customers. Meta’s local advertising arm, Facebook India Online Services, reported a revenue of $351 million for the 2023-24 financial year, marking its highest earnings in at least five years.

A Meta spokesperson welcomed the NCLAT’s decision and stated that the company would “evaluate next steps,” Reuters reported. Meanwhile, the CCI has not yet commented on the ruling but retains the option to challenge the tribunal’s decision in India’s Supreme Court.

The legal battle stems from privacy policy changes WhatsApp introduced in 2021, which drew widespread criticism. Critics argued that the new policy forced users to accept data-sharing terms under the threat of losing access to the platform. The CCI’s investigation concluded that WhatsApp’s approach amounted to unfair practices that violated competition norms.

This case bears similarities to another high-profile legal challenge WhatsApp faced in the European Union. In 2021, the company was accused of breaching EU regulations by failing to communicate policy changes clearly to users. It eventually agreed to make its terms more transparent for European users.

Source: Reuters