Supreme Court's Warning to Meta Platforms and WhatsApp
The Supreme Court of India has issued a stern warning to Meta Platforms and WhatsApp, stating that compliance with Indian laws is mandatory for their operation in the country. The court emphasized its unwillingness to allow the exploitation of Indian citizens’ personal data.
Context and Legal Proceedings
- The court's remarks came during appeals by Meta and WhatsApp against the National Company Law Appellate Tribunal's (NCLAT) decision.
- NCLAT upheld a ₹213.14-crore penalty by the Competition Commission of India (CCI) regarding WhatsApp’s 2021 privacy policy.
- The CCI argued against NCLAT's allowance of data sharing for advertising, claiming no abuse of dominance was found.
Privacy Concerns
- The Chief Justice expressed concerns about the platforms' privacy framework and indicated a potential restraint on data sharing unless an affidavit with an undertaking is provided.
- He criticized the platforms for creating a monopoly, questioning the real choice available to users.
- The court underscored the lack of understanding of privacy policies by ordinary users, highlighting the disconnect between policy language and consumer comprehension.
Commercial Exploitation of Data
- Solicitor General highlighted the commercial exploitation of personal data.
- Justice Bagchi pointed out the use of behavioral analysis for targeted advertising and the need for judicial oversight in such domains.
- The court discussed the "value" of data sharing, observing gaps in the Digital Personal Data Protection (DPDP) Act, 2023.
Meta and WhatsApp's Defense
- Senior advocates argued that messages on WhatsApp are end-to-end encrypted and assured that user activities comply with other jurisdictions.
- Rohatgi mentioned that WhatsApp has pledged not to bar users who reject the 2021 policy.
Court's Future Actions and Concerns
- The Bench has postponed the matter to allow Meta to file an affidavit explaining their data handling practices.
- The CCI's penalty stems from findings of abuse of dominance, with the NCLAT upholding monetary penalties but adjusting some directives.
Background of the Case
- The issue originated from the CCI's November 2024 order on WhatsApp’s 2021 privacy policy.
- The CCI identified a "take-it-or-leave-it" policy that restricted meaningful user choice, constituting abuse under the Competition Act, 2002.
- The NCLAT later revised certain prohibitions but maintained the imposed financial penalty.
