NCLAT upholds ₹213 crore fine on Meta but allows WhatsApp to share data for ads

NCLAT Lifts WhatsApp-Meta Data Sharing Ban

The National Company Law Appellate Tribunal (NCLAT) on Tuesday set aside the Competition Commission of India&rsquo;s (CCI) direction that barred WhatsApp from sharing user data with Meta group companies for advertising purposes, while upholding the ₹213.14 crore penalty imposed on Meta.
A bench comprising Justice (Retd.) Ashok Bhushan, Chairperson, and Barun Mitra, Member (Technical), also overturned the CCI&rsquo;s finding that Meta had leveraged its dominant position in the over-the-top (OTT) messaging market to protect its standing in the online advertising sector.
However, the tribunal upheld other parts of the order, including the penalty imposed on Meta.
In November 2024, the CCI had fined Meta ₹213.14 crore after concluding that WhatsApp&rsquo;s 2021 privacy policy update amounted to an abuse of dominance. 
The Commission found that the &ldquo;take-it-or-leave-it&rdquo; approach imposed unfair conditions on users, undermined their autonomy and violated provisions of the Competition Act, 2002.
The CCI had also directed WhatsApp not to share user data with Meta or its affiliates for five years. 
It required the messaging platform to clearly specify the purpose of each category of data collected and prohibited making data sharing a precondition for accessing its services in India.
WhatsApp and Meta subsequently challenged the order before the NCLAT. 
In January 2025, the tribunal stayed both the penalty and the five-year data-sharing ban, observing that such restrictions could &ldquo;lead to the collapse of the business model of WhatsApp LLC since the platform is free.&rdquo; 
The stay on the penalty was made conditional upon Meta and WhatsApp depositing 50% of the amount.
Senior Advocate Amit Sibal, representing Meta, argued that the CCI&rsquo;s findings were based on &ldquo;exaggerations and speculation.&rdquo; 
He maintained that user data was not shared with Meta for advertising purposes except in limited, optional contexts such as the &ldquo;Click to WhatsApp&rdquo; feature, where users were shown a transparency screen and not compelled to engage with businesses.
Representing the CCI, Senior Advocate Balbir Singh contended that Meta&rsquo;s extensive integration across Facebook, Instagram, Messenger and WhatsApp entrenched its dominance. 
&ldquo;No other player comes close in terms of user dependence, network effects and cross-platform synergy,&rdquo; he argued.
Singh further alleged that WhatsApp exploited its dominant position by introducing the 2021 privacy policy on a &ldquo;take it or leave it&rdquo; basis, using mandatory notifications to create &ldquo;a manufactured sense of urgency&rdquo; that left users fearing loss of access to a vital communication tool. 
The new policy, he said, removed earlier opt-out safeguards and compelled even users who had previously rejected cross-platform data sharing to accept it.
Senior Advocates Kapil Sibal, Mukul Rohatgi and Arun Kathpalia also appeared for Meta and WhatsApp during the proceedings.

NCLAT building exterior with official nameplate

4 નવેમ્બર, 2025 | 17:19 IST

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