India’s antitrust watchdog orders investigation into WhatsApp’s privacy policy

India’s competition watchdog on Wednesday ordered an investigation into WhatsApp’s controversial privacy policy update after finding that prima facie, it violates the competition law.

The Competition Commission of India or CCI’s order came after it took suo moto cognisance of the Facebook-owned popular platform’s updated privacy policy on the basis of media reports, calling the updates “exploitative” and “exclusionary conduct”.

The CCI has directed its investigative arm to complete the investigation and submit its report within 60 days, noting that a thorough and detailed investigation was necessary to ascertain the full extent, scope and impact of data sharing between WhatsApp and Facebook group of companies through involuntary consent of users.

“We look forward to engaging with the CCI. WhatsApp remains committed to protecting people's personal communications with end-to-end encryption and providing transparency about how these new optional business features work,” a WhatsApp spokesperson said in a statement to Entrackr.

Facebook did not respond to a request for comment until publication. 

In January 2021, WhatsApp had announced updates to its privacy policy and terms of service which while being mandatory for users to accept, allowed for a closer integration of the messaging app with other Facebook group companies. 

The proposed updates had caused a privacy-related furore. A number of pleas were filed in several courts across the country asking for WhatsApp to retract the updates. India’s information and technology ministry had also sent a questionnaire seeking more details about the update, and last week, even told the Delhi High Court that WhatsApp’s privacy policy update should be blocked. 

According to WhatsApp’s 2016 privacy policy, users had an option to opt out of sharing their data with Facebook within 30 days of agreeing to the policy and terms of service update, the CCI noted. However, the 2021 updates provide no such option to the users, it added. 

“Simply put, it appears that consent to sharing and integration of user data with other Facebook Companies for a range of purposes including marketing and advertising has been made a precondition for availing WhatsApp service,” the order said. This “take-it-or-leave-it” nature of the policy merits a detailed investigation into market position and power enjoyed by WhatsApp, it said. 

In a public version of its submission filed on February 25, WhatsApp had asked the CCI to not look into the issue since it had postponed the implementation of its policy to April 15 and that abuse of dominance is a post-facto analysis and called the scrutiny “premature”. 

However, the CCI said that it was examining WhatsApp’s proposed updates from a competition lens. 

Facebook was also asked by the CCI to submit its comments in January, but it did not respond to the regulator’s queries despite clear directions.  The commission had then asked Facebook to submit its response by February 25. 

In its submission, Facebook told the commission to not include it as a party to the case. However, the regulator found Facebook’s response to be evasive.