Delhi High Court Reserves Verdict On Facebook, WhatsApp Challenge To CCI Order For Anti-Trust Probe

A single judge bench of Justice Navin Chawla of the Delhi High Court today reserved its verdict on Facebook Inc and its subsidiary WhatsApp's challenge to a Competition Commission of India (CCI) order directing for a probe into WhatsApp's new privacy policy for being anti-competitive.

The court finished hearing arguments at length by the 3 concerned parties - Sr. Adv. Harish Salve for WhatsApp, Sr. Adv. Mukul Rohatgi for Facebook and Additional Solicitor General Aman Lekhi for the CCI.

Informing the court that they have submitted their written replies in the matter, Salve argued that the CCI's order stating that there was allegedly excessive date collection being effectuated by the new policy, and it needed to be examine whether excessive data collection would have anti-competitive implications was infringing upon an issue outside its bounds. He said that it is infact the government that has to make a law on the issue.

He added that, "(The) primary aim of the 2021 policy is to provide users more transparency and to inform users how business services work for providing optimal benefits. WhatsApp has a separate business service - providing for linking it with Facebook."

Dissing privacy infringement concerns, he submitted that, "WhatsApp cannot see users' personal conversations with their friends and family as they are protected by end-to-end encryption and that the 2021 updates do not change this."

He clarified that the 2021 updates only work on business accounts linked to Facebook.

Raising the issue of jurisdiction he stated that personal data protection and privacy are constitutional matters, and therefore CCI had no business adjudicating upon the matter.

He further highlighted that WhatsApp's previous 2016 policy already provided for such sharing and said, "All the allegations harp back to the 2016 policy. When you talk of data, please appreciate, what I communicate to my friends, family, colleagues - WhatsApp can't read. But that I am a user, my number, I contact 10 lawyers in a day, that data is being shared. To use my platform, one has to give me their number. There is commercial use of data created in my system. I am not asking the user for his data."

He went on to add that there was no addition to the old policy and that the new policy was brought out purely for business and commercial users, to enable them to "use WhatsApp in a particular way" - a way for WhatsApp to come clean about how it was going to use the data it has collected.

Sr. Adv. Mukul Rohatgi appearing for Facebook, argued that it was "nobody's case that it is a joint policy," and therefore no order could have been passed against Facebook by CCI.

He too raised the issue of jurisdiction stating based upon the principle of comity of courts, stating that with challenges to the policy pending before the Supreme Court and Delhi High Court itself, the CCI was an "inferior" body that couldn't adjudicate upon the issue while the challenges were still sub judice before constitutional authorities.

"If a controversy is ongoing, can the CCI say, "No, I'm a creature of statute," and jump into it when it's already pending before constitutional authorities? I'm challenging the jurisdiction of CCI to do this," he argued.

He explained that the effect of the new privacy policy was essentially that, purchases from certain businesses could be directly on Whatsapp without going to the business' website.

He argued, "If I'm making a purchase on Air India how is that private information?"

On these grounds Facebook sought a stay on the CCI proceedings against Whatsapp and itself, saying that there are already cases pending in other courts, and that no harm will arise if these proceedings are stayed.

ASG Aman Lekhi for CCI, on the other hand argued that the matter here was not of privacy but of access to data and therefore, the CCI was acting well within its ambit.

He added, "The CCI will come into the picture only when the investigation report says that there is infact abuse of dominant position. Whether or not a positive report will be filed, is an issue still writ large."

He submitted that though the policy by way of its nomenclature was called the Privacy Policy, the aspect being rightly looked into by the CCI was of abuse of market position by way of the said policy, which allegedly enabled excessive data collection and sharing.

He said that the CCI as the sectoral regulator had correctly passed the probe order.

He said, "The question was whether in a data driven eco-system whether excessive data sharing or use would result in anti-competitive consequence."

In a hyperbole he added that, "The analysis of the data collected by WhatsApp will give even more information about an individual than actual physical stalking."

Talking about the anti-trust consequences he said that, "Using this data, they will eventually either buy-out the competition or make it irrelevant. Facebook comes into the picture because of the privacy policy through which data collection is happening."