Meta on Tuesday said it disagrees with the decision of the Competition Commission of India and will file an appeal challenging the order.
CCI has imposed a hefty penalty of ₹213.14 crore on Meta for abusing its dominant position. The penalty pertains to the controversial implementation of WhatsApp’s 2021 Privacy Policy, which mandated data sharing between WhatsApp and other Meta companies, raising serious concerns about user autonomy and market fairness.
To appeal
In response to the order a Meta spokesperson said “We disagree with the CCI’s decision and plan to appeal. As a reminder, the 2021 update did not change the privacy of people’s personal messages and was offered as a choice for users at the time. We also ensured no one would have their accounts deleted or lose functionality of the WhatsApp service because of this update.”
With this, India has now joined other countries like those in the European Union region to restrict Meta’s use of personal data for targeted advertising. Since the order is likely to impact Meta’s targeting arm as well, the key question is whether the company will be introducing a platform fee or a subscription model in India like it did in the EU.
However, experts like Pranesh Prakash, Principal Consultant at Anekaanta Advisory and Co-Founder of the Centre for Internet and Society, told businessline that the company is unlikely to make such a move simply based on the CCI order.
“It’s possible that companies may offer paid services rather than just advertising-based services but I’m not sure how the order would impact it given the kind of analysis given by CCI. I do think there should be a choice. For those who don’t want to pay, they should be allowed to trade their data and those who don’t want to trade data should be allowed to pay money. But I’m unsure how this judgement will accelerate that,” said Prakash.
Similarly, Rahul Rai, anti-trust lawyer and Partner at Axiom5, told businessline that platforms are unlikely to implement a fee or subscription model due to the risk of losing users in India.
“The CCI’s directive does not permanently prohibit WhatsApp from sharing user data with its affiliated companies for advertising purposes. The restriction is for a limited period of five years, after which user data from WhatsApp can be shared with other companies in the Meta group for advertising purposes as well, subject of course to the compliance with enhanced transparency, and more meaningful user choice conditions specified by the CCI,” said Rai, stating that other technology companies involved in cross-pollinating user data across their platforms will likely reassess their policies regarding data sharing. They would likely align their practices with the CCI’s directive than impose fees and risk losing a significant number of customers.
Opportunity for rivals
However, noting that the CCI restriction does not apply to other purposes, Rai said there may be an opportunity for rival ad-tech service providers to compete more effectively with Meta.
“It may pave the way for smaller ad-tech companies to gain a stronger foothold and offer their services on Meta’s platforms. Competition among various service providers for targeted advertising on Instagram, Facebook, and Threads may escalate over time,” he said.