WhatsApp Privacy Policy Case: NCLAT Clarifies CCI's Safeguards For Non-Advertising Data Apply To Advertising Data Too

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Monday allowed the Competition Commission of India's plea seeking clarification on whether the privacy and consent safeguards upheld in its November 4 judgment would also govern WhatsApp's sharing of user data with Meta for advertising purposes.

A bench led by Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka clarified that the safeguards apply to WhatsApp's user data collection and sharing for all purposes, including advertising, and granted the messaging platform three months to bring its practices in line with the directions.

The clarification plea was filed by the CCI after it argued that while the tribunal's earlier judgment repeatedly emphasised express and revocable user consent for any non-essential data use, including advertising, the operative portion did not explicitly extend the upheld safeguards to advertising-related data sharing.

Allowing the application, the tribunal said:

“This is above analysis. We therefore allow the application of the Commission. Accordingly, It is clarified that remedial directions contained in paras 247.2.1 to, paras 247.2.4 of the applicants is given. The order dated 18th November, 2024 (CCI Order) will apply to WhatsApp user data collection and sharing for all WhatsApp purposes including non advertising and advertising purposes. Furthermore, WhatsApp is allowed three months time to comply with the direction bringing about necessary changes.”

In its November 4 ruling, the NCLAT had struck down the CCI's earlier direction imposing a blanket five-year prohibition on the use of WhatsApp user data for advertising. The tribunal held that such a restriction was unwarranted once users were provided a meaningful opt-in and opt-out choice.

At the same time, it upheld several safeguards for non-advertising data sharing, including requirements that WhatsApp clearly explain what categories of user data are shared with Meta companies, link each category to a specific purpose, and ensure that non-service-related data sharing is not made a condition for accessing WhatsApp in India.

The tribunal also directed that all users, including those who accepted the 2021 privacy policy update, be given the same rights and choices for non-service-related data use.

The CCI had approached the appellate tribunal arguing that the judgment repeatedly emphasised that any non-essential collection or cross-use of data, including for advertising, could take place only with the user's express and revocable consent. It submitted that this principle ought to apply equally to advertising-related data sharing, even though the operative part of the judgment had set aside all directions regulating such data flows.

Meta and WhatsApp opposed the plea on the ground that the NCLAT has no power of review and cannot alter or supplement its operative directions through a clarification application.

Senior advocate Kapil Sibal, appearing for Meta, argued that even if any ambiguity existed, it could not be corrected through this route and that the CCI's only remedy was to file an appeal. Counsel for WhatsApp supported this objection, contending that the regulator was seeking to reintroduce directions that the tribunal had consciously removed.

The CCI countered that it was not seeking a review or rewriting of the order, but only a clarification to ensure that the conclusions reflected the tribunal's own findings, which it said treated advertising and non-advertising data under a unified consent framework.

After hearing arguments on whether Section 53(O) of the Competition Act permits such a clarification, the bench allowed CCI's plea.

Case Title: Whatsapp LLC v CCI