Privacy Policy: Delhi High Court To Hear On July 21 Appeals By Whatsapp & Facebook Against CCI Investigation

The Delhi High Court will hear on July 21 the appeals filed by WhatsApp and its parent company Facebook Inc. (now Meta) against a single bench order declining to interfere with CCI's investigation into WhatsApp's new privacy policy.

A division bench comprising of Justice Rajiv Shakdher and Justice Poonam A. Bamba directed the parties to file their written submissions not exceeding three pages, before the next date of hearing.

The bench also directed that the interim order dated January 3, 2022, vide which a predecessor bench had extended the time to respond to the notices issued by the Competition Commission of India, will continue to remain in force.

The Competition Commission of India had ordered a probe into the new privacy policy of WhatsApp after making a prima facie observation that it was violative of the Competition Act 2000.

Issuing notices to both WhatsApp and its parent company, CCI had observed that the privacy policy terms on sharing of personalised data with Facebook companies was "neither fully transparent nor based on specific, voluntary consent of users".

During the course hearing today, Senior Advocate Harish Salve appearing on behalf of WhatsApp took the Court through the facts of the case.

He apprised the Bench that WhatsApp had given an undertaking to the Central Government to not enforce its privacy policy till the time the Personal Data Protection Bill comes into force.

"We have given undertaking to the Government, till the Personal Data Protection Bill (PDP) Bill comes, this (privacy policy) will be in freeze. That coercion that you have to opt out is gone," he submitted.

He added " If the parliament and Union Government is seized of it, where is the question of CCI banging on?"

At the outset, Justice Shakdher expressed concern over the issue faced by citizens regarding sharing and scraping of data by Facebook.

"Tell me one thing, about a concern which every citizen has, regarding Sharing of data by facebook..someone needs to look into it," Justice Shakdher orally remarked thus.

He added "Aside this case, they say they have 5000 data points on every citizen and that's what they did in America."

The Court also referred to Cambridge Analytica for questioning data sharing in closed groups on the social media platform Facebook.

The Court accordingly posted the matter for further hearing on July 21 while recording Salve's stand that since Personal Data Protection Bill is pending consideration, the matter could be stood over to July.

While the opposing counsels had no objection to the same, it was requested that the hearing is not deferred on the next date of hearing citing pendency of the said Bill, if it is not enforced till then. Salve agreed to the said request.

During the previous course of hearings, Whatsapp had undertaken to not enforce its privacy policy till the time the Data Protection Bill comes out. Salve had assured the Court that the company will conform to the parliamentary law.

"If parliament allows me to do it, I'll do it. Otherwise I won't do it. It has become academic now. The commitment is that I'll not do anything if the parliamentary law comes. When such law is made, we need to fit in the law," Salve had submitted. 

Rohatgi for Facebook had argued that there was overlapping of issues before the Supreme Court, the High Court and the CCI and stated that the CCI's examination of the matter was therefore impinging on constitutional propriety.

"Suo moto Jurisdiciton is to be sparingly exercised by a body like CCI. The Supreme Court is already examining the 2016 policy. There are three matters are pending in the Delhi High Court. The question is even assuming there is suo moto Jurisdiciton, can it be exercised when superior constitutional courts are examining the policy?" Rohatgi had said.

The CCI had made a prima facie observation that the policy was an abuse of dominant position resulting in violation of Section 4 of the Competition Act.

The anti-trust regulator termed the privacy policy terms "take-it-or-leave-it' terms set by a dominant messaging platform, without providing much information to the users, and observed that the policy prima facie appeared to be "unfair and unreasonable".

The CCI bench comprising Ashok Kumar Gupta(Chairperson), Sangeeta Verma(Member) and Bhagwant Singh Bishnoi(Member) observed that "a thorough and detailed investigation is required to ascertain the full extent, scope and impact of data sharing through involuntary consent of users".

Accordingly, the Commission directed the Director General ('DG') to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act. The Commission also directed the DG to complete the investigation and submit the investigation report within a period of 60days from the receipt of this order.

Case Title: Whatsapp LLC v. CCI, Facebook v. CCI