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CCI directs probe, terms new WhatsApp policy ‘exploitative’

The probe into the instant messaging platform’s policies follows not only the increasing scrutiny of the messaging platform’s updated terms but also a series of regulatory measures by Indian authorities against Big Tech companies.

Written by Aashish Aryan , Pranav Mukul | New Delhi |
Updated: March 25, 2021 4:27:24 am
WhatsApp privacy policyAs per WhatsApp's submissions, the 2021 update does not expand its ability to share data with Facebook and the update intends to provide users with further transparency about how WhatsApp collects, uses and shares data. (File)

The Competition Commission of India (CCI) has launched an investigation into WhatsApp’s new privacy policy, which was already under judicial scrutiny.

The antitrust body has taken a prima facie view that Facebook-owned WhatsApp’s new policy is in contravention of India’s Competition Act “through its exploitative and exclusionary conduct…in the garb of policy update”. It has also asked the director general to launch an anti-trust investigation under Section 26 (1) of the Competition Act and submit a report within 60 days.

The probe into the instant messaging platform’s policies follows not only the increasing scrutiny of the messaging platform’s updated terms but also a series of regulatory measures by Indian authorities against Big Tech companies. On January 4, WhatsApp’s updated policy terms were first announced via an in-app notification to users, asking them to agree to the new terms by February 8 or lose access to their accounts. As both users and privacy activists raised the alarm, WhatsApp clarified that the changes were necessary to help businesses through WhatsApp Business. The deadline was later extended till May 15.

The CCI, on January 19, decided to take suo moto cognisance of the potential impact of the policy and terms for WhatsApp’s users and the market. WhatsApp India, which has 53 crore users in the country, said it remained committed to “protecting people’s personal communications with end-to-end encryption”. “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.

Noting that users will mandatorily need to accept the new terms including the terms with respect to sharing of their data across all the information categories with other Facebook companies, in order to be able to use WhatsApp, the CCI said: “… the Commission is of prima facie opinion that the ‘take-it-or-leave-it’ nature of privacy policy and terms of service of WhatsApp and the information sharing stipulations mentioned therein, merit a detailed investigation in view of the market position and market power enjoyed by WhatsApp”. According to the CCI order, WhatsApp submitted that the policy update did not expand its ability to share data with Facebook and that the said update intended to “provide users with further transparency about how WhatsApp collects, uses and shares data”. The CCI said that the veracity of such claims would also be examined during the probe.

The CCI has pinpointed several other concerns with the new privacy policy including aspects such as the “opacity, vagueness, open-endedness and incomplete disclosures” hiding the actual data cost that a user incurs for availing WhatsApp services.

“Users have not been provided with appropriate granular choice, neither upfront nor in the fine prints, 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 noted.

In February this year, a three judge-bench headed by the Chief Justice of India, Justice S A Bobde, agreed to hear a plea challenging the latest privacy policy update announced by the platform.

During the hearing of the case, the CJI-led Bench had observed that WhatsApp “may be $2-3 trillion companies”, but people valued their privacy more than money and it was the court’s duty to protect privacy.

Separately, a plea has also been filed in the Delhi High Court, which seeks to restrain WhatsApp from rolling out the new policy update. The Ministry of Electronics and Information Technology had in its affidavit to the court, citing five counts of violation of the 2011 IT Rules, agreed with the position and asked court to restrain WhatsApp from coming out with the latest update in privacy policy.

Last November, the CCI had ordered a probe into Google’s payments app for allegedly abusing its dominant position to force app developers to use its billing system for in-app purchases, and for bundling Google Pay with Android smartphones sold in India.

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