NCLAT Reserves Orders On CCI's Plea To Extend Privacy Consent Safeguards To WhatsApp Advertising Data

The National Company Law Appellate Tribunal (NCLAT) on Tuesday reserved orders on the Competition Commission of India's plea seeking clarification of its November 4 judgment that struck down the five-year bar on WhatsApp sharing user data with Meta for advertising, after the CCI argued that the tribunal's own reasoning mandated a uniform consent framework covering both advertising and non-advertising data flows.

The CCI has asked the tribunal whether, in light of the judgment's emphasis on user privacy and consent, the privacy safeguards upheld for non-advertising data sharing should also extend to data shared for advertising purposes.

The matter was heard by a bench of Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka who reserved orders on the clarification plea. 

In the November 4 ruling, the NCLAT had struck down the CCI's earlier direction that imposed a blanket five-year ban on the use of WhatsApp user data for advertising. The tribunal held that such a restriction was unnecessary once users were given a meaningful opt-in and opt-out choice. However, it upheld safeguards requiring WhatsApp to explain in detail what user data is shared with Meta companies and link each category of data to a specific purpose, prohibiting WhatsApp from making non-service-related data sharing a condition for accessing the service in India, and directing that all users, including those who accepted the 2021 policy update, must be provided the same rights and choices for non-service-related data use

During the hearing, counsel appearing for the for the regulator insisted that CCI was not seeking a review but only a clarification necessary to align the operative portion of the judgment with the findings. He argued that the tribunal had repeatedly held that “any non-essential collection or cross-use like advertising can occur only with the user's express and revocable consent”, and submitted that this principle ought to apply equally to advertising-related sharing, even though the operative part set aside all directions regulating such data flows.

The appellate tribunal questioned the maintainability of the application after both Meta and WhatsApp argued that the NCLAT has no power of review and cannot correct “ambiguities” through such a motion.

Kapil Sibal, appearing for Meta, submitted that “even if any ambiguity exists, this tribunal has already held in previous judgments that it cannot be corrected through this process.” He added that the CCI's remedy lay only in an appeal, not in a clarification application that effectively sought to rewrite the operative directions.

Senior counsel appearing for WhatsApp, supported the objection, contending that the CCI was attempting to reintroduce directions the tribunal had consciously set aside noting that WhatsApp already demonstrates an in-app consent mechanism and that the tribunal cannot now be asked to prescribe a different form of consent that the CCI never argued for earlier.

The CCI's counsel countered that the tribunal's findings and conclusions were “inconsistent”, pointing out that the judgment repeatedly treated advertising and non-advertising data under a unified consent requirement but ultimately set aside all safeguards relating to advertising. He argued that this discrepancy could be corrected under the tribunal's statutory powers. He said that the plea is “not to rewrite the order, but to ensure the conclusion reflects the intended findings.”

The bench heard arguments on whether Section 53(O) of the Competition Act, which confers civil-court-like powers on the NCLAT, includes a power of review, and whether the CCI's request could fit within the narrow window for correcting accidental omissions.

During rebuttal, Sibal maintained that the CCI was effectively asking the tribunal to “insert something it never intended”, adding that the regulator was seeking to relitigate issues already demonstrated during the hearing. After hearing both the parties, the bench reserved its orders.

Case Title: Whatsapp LLC v CCI