The Competition Commission of India has fined Meta Rs 213.14 crore, or more than $ 20 million, over its WhatsApp privacy policy update done in 2021, terming it unfair.
The competition watchdog in an order issued on Monday directed the Facebook-owner to "cease and desist" from "anti-competitive" practices and granted it time to implement certain behavioural remedies.
The regulator also barred WhatsApp from sharing users' data with other Meta companies for advertising purposes for five years.
"Meta Group operating through WhatsApp was found to be dominant in the market for OTT messaging apps through smartphones in India.
"Furthermore, it was also found that Meta holds a leading position compared to its competitors in online display advertising in India," CCI said in a release.
WhatsApp in January 2021 notified users about updates to its terms of service and privacy policies.
According to the notification, users were required to accept the terms, which included an expanded scope of data collection as well as mandatory data sharing with Meta companies, to continue using WhatsApp.
In contrast, under its previous privacy policy, dated August 25, 2016, WhatsApp users were given the option to choose if they wanted their data to be shared with Facebook.
"However, with the latest policy update in 2021, WhatsApp made data sharing with Meta mandatory for all users, removing the earlier option to opt-out. As a result, users had to accept the new terms, which include data sharing with Meta, in order to continue using the platform," CCI said.
The watchdog declared the policy an unfair condition under the Competition Act and found WhatsApp parent Meta in contravention of Section 4(2)(a)(i) of the Act.
The CCI also said that the practice posed entry level barriers for the rivals, and thus a denial of access to them in the ads market.
According to the regulator, Meta engaged in leveraging its position in the OTT messaging apps to protect its position in the online display advertising market.
It also ruled that WhatsApp's policy now must include a "detailed explanation" of the user data shared with other Meta companies. "This explanation should specify the purpose of data sharing, linking each type of data to its corresponding purpose."
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