WhatsApp's New Privacy Policy Shares Sensitive Data With Facebook, Forces Users Into Agreement By Providing Mirage Of Choice: Delhi HC

"The 2021 Policy places its users in a "take-it-or-leave-it" situation, virtually forcing its users into agreement by providing a mirage of choice, and then sharing their sensitive data with Facebook Companies envisaged in the policy," the Delhi High Court has observed while upholding the proposed investigation of Competition Commission of India (CCI) into WhatsApp's privacy policy.A division bench comprising of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad dismissed the appeals filed by WhatsApp and its parent company Meta (formerly Facebook) against a single bench order declining to interfere with CCI's investigation into the 2021 privacy policy.Noting that WhatsApp occupies a dominant position in the relevant product market, the Court observed that there exists a strong "lock-in effect" which renders its users incapable of shifting to another platform "despite dissatisfaction with the product" which is exemplified by how, despite an increase in the downloads of other applications like Telegram and Signal when the 2021 Policy was announced, the number of users of WhatsApp remained unchanged. "By and large, to ensure retention of its user base and to prevent any other disruptive technology from entering the market, data is utilised by tech companies to customise and personalise their own platforms so that its user base remains hooked. When data concentration is seen through this prism, it does give meaning to the new adage that "data is the new oil", and, as noted in the CCI Order dated 24.03.2021, it raises competition concerns because it prima facie amounts to imposition of unfair terms and conditions upon its users, thereby violating Section 4(2)(a)(i) of the Act," the Court observed. The Court rejected the reliance placed by Whatsapp and Facebook on CCI's Order in Vinod Kumar Gupta case wherein the 2016 Policy was upheld with the finding that there had been no abuse of dominance by the Whatsapp. The Court said that the reliance was misplaced for the simple reason that 2016 Policy provided its users the option to "opt-out" of sharing user account information with Facebook within 30 days of agreeing to the updated Terms of Service and Privacy Policy. "The 2021 Policy, however, places its users in a "take-it-or-leave-it" situation, virtually forcing its users into agreement by providing a mirage of choice, and then sharing their sensitive data with Facebook Companies envisaged in the policy. Therefore, it cannot be said that the CCI is bound by its own findings in Vinod Kumar Gupta (supra) when the issue at hand as well as the circumstances are different," the Court said. The Court also adjudicated on the issue of overlapping jurisdiction of the CCI and the Constitutional Courts, and whether CCI should abstain from exercising its jurisdiction to maintain comity between decisions of different authorities on the same issues.It was argued by Whatsapp and Facebook that since the underlying issues arising before the Apex Court and High Court, and the investigation that was sought to be conducted by the CCI were common, this could lead to conflicting opinions. It was their case that while the Apex Court was looking into the question of privacy violation qua 2021 Policy under Article 21 of the Constitution of India, the investigation by CCI was confined to whether the 2021 Policy was in furtherance of the dominant position occupied by WhatsApp and institutes anti-competitive practices.Thus rejecting Whatsapp's said contention, the Court said: "The sphere of operation of both are vastly different. Neither this Court nor the Supreme Court are analysing the 2021 Policy through the prism of competition law."The Court was of the view that even if the issues were the same, the approach of the authorities was vastly dissimilar, and that there existed no inviolable rule that the CCI would completely lack jurisdiction in the instant matter. "Parallel inquiries by two different authorities in their respective spheres of adjudication is not uncommon and a slight overlap between the inquiries does not mean that one must lead to the ouster of the other. Therefore, in the absence of any irreconcilable repugnancy between the jurisdiction of both the authorities, i.e. CCI and the Constitutional Courts, the CCI has the liberty to proceed ahead with its investigation under Section 26(1) of the Act," the Court said. It added "The investigation conducted by the CCI will not be affected by the outcome of the proceedings pending before the Apex Court and this Court. In the event the Supreme Court upholds the 2021 Policy, then surely CCI can venture into the question as to whether the provisions of the Act have been violated or not. In the event that the 2021 Policy is set aside by the Supreme Court, the CCI will still possess the jurisdiction to investigate the violation of the Act, if any, during the pendency of the matter before the Supreme Court when the 2021 Policy was in operation. In either of the cases, it ...

WhatsApp's New Privacy Policy Shares Sensitive Data With Facebook, Forces Users Into Agreement By Providing Mirage Of Choice: Delhi HC

Nupur Thapliyal

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