An Indian tribunal on Thursday suspended restrictions that would have barred WhatsApp from sharing user data with its parent company Meta, delivering a significant victory for Mark Zuckerberg’s social media empire in its largest market by users.
The ruling by the National Company Law Appellate Tribunal temporarily lifts a five-year ban imposed by India’s antitrust regulator, which had accused WhatsApp of abusing its market dominance through its 2021 privacy policy.
India is the largest market for Meta and WhatsApp. More than 700 million users in India use WhatsApp each month, according to insights from Sensor Tower.
In November, the Competition Commission of India determined that WhatsApp’s “take-it-or-leave-it” privacy update constituted an abuse of Meta’s dominant position by forcing users to accept expanded data collection without an opt-out option.
At the time, the watchdog found Meta was dominant in two key markets in India: a so-called “over-the-top” messaging apps through smartphones, and online display advertising.
While staying the ban on Thursday, the tribunal ordered Meta to deposit about $12.35 million — half of a larger penalty — within two weeks. The court will next hear the case on March 17.
The tribunal, led by Justice Ashok Bhushan, expressed concern that the five-year ban could threaten WhatsApp’s business model, which provides the messaging service free to users.
Meta’s lawyers argued that India’s forthcoming digital privacy law, expected to go into effect later this year, should govern such matters rather than competition rules.
“We welcome the NCLAT’s decision to grant a partial stay on the Competition Commission of India’s (CCI) order. While we will evaluate next steps, our focus remains on finding a path forward that supports millions of businesses that depend on our platform for growth and innovation as well as providing high-quality experiences that people expect from WhatsApp,” a Meta spokesperson said in a statement.
The dispute began when WhatsApp required users to accept expanded data sharing with Meta’s platforms or risk losing access to the messaging service. While European users can opt out of such sharing, Indian users cannot — a distinction that regulators found problematic.
