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Delhi High Court on Wednesday dismissed a plea filed by Facebook India Online Services Pvt. Ltd. (Facebook India Online) challenging the probe letters issued by the Director-General (DG) – an investigation arm of the Competition Commission of India (CCI), in connection with the ongoing inquiry of privacy policy update announced by WhatsApp in 2021. Facebook India Online Services Private Limited is the subsidiary of Facebook Inc or Meta, a global tech major. This subsidiary was “clubbed” in the investigation on the basis of the decision of CCI’s Director General.
While dismissing the plea, Justice Yashwant Varma of Delhi High Court orally observed that “there has to be some end to luxury litigation”.
Following an information by the Internet Freedom Foundation, Facebook India Online was made a party in the ongoing investigation by the DG in the suo motu probe ordered by CCI against WhatsApp and Meta in connection with WhatsApp’s update to its Terms of Service and Privacy Policy in 2021.
Earlier, Division Bench of Delhi High Court had on August 25 refused to stay the probe ordered by the CCI into the privacy policy introduced by messaging service WhatsApp last year.
A Division Bench of Chief Justice Satish Chandra Shama and Justice Subramonium Prasad had dismissed pleas by WhatsApp and its parent, Facebook (now Meta). The Letters Patents Appeal (LPA) filed by WhatsApp and Facebook were dismissed as devoid of merit.
The appellants then requested the court to extend the interim stay so that they could file replies before the CCI. The court rejected this too.
Privacy policy
In January 2021, WhatsApp announced privacy policy and terms of service updates. Users have to mandatorily accept the new terms and policy in their entirety, including those concerning expanded data collection and sharing with other Facebook companies.
Under the previous privacy policy dated August 25, 2016, users could choose whether or not they wanted to share their WhatsApp data with Facebook.
In March 2021, the CCI passed an order forming a prima facie opinion of the violation of Section 4 of the Competition Act, and directed an investigation.
CCI remark
The CCI had noted in its order that the ‘take-it-or-leave-it’ nature of the privacy policy and terms of service of WhatsApp and the information-sharing conditions merited a detailed investigation on the market position and power enjoyed by the messaging service.
The regulator also noted that the data and data analytics have immense relevance for the competitive performance of digital enterprises. For Facebook, data from WhatsApp can supplement the consumer profiling it does through the data collection on its platform.
CCI remarked that under competitive market conditions, users would have sovereign right and control over decisions related to the sharing of their personalised data
WhatsApp and Facebook had challenged the CCI’s probe in Delhi High Court, claiming that since WhatsApp’s 2021 policy has been challenged before the Supreme Court, the CCI should not have taken up the matter. However, agreeing with CCI, the single judge bench of Delhi High Court dismissed the petition and allowed the probe to continue.
WhatsApp and Facebook challenged the single-judge bench’s order before the Division Bench.
The Division Bench, after hearing the arguments of WhatsApp, Facebook and CCI in July 2022, dismissed the pleas of the petitioners on August 25.
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