Prachi Kohli and WhatsApp LLC

Public Version SM Case No. 01 of 2021 and Case Nos. 05 of 2021 & 30 of 2021 1 COMPETITION COMMISSION OF INDIA Suo Motu Case No. 01 of 2021 In Re: Updated Terms of Service and Privacy Policy for WhatsApp users Against: WhatsApp LLC Opposite Party No. 1 Meta Platforms, Inc. Opposite Party No. 2 WITH Case No. 05 of 2021 In re: Prachi Kohli Informant Against: WhatsApp LLC Opposite Party WITH Case No. 30 of 2021 In re: Internet Freedom Foundation Informant Against: WhatsApp LLC Opposite Party No. 1 Meta Platforms, Inc. Opposite Party No. 2 Present For WhatsApp LLC (WhatsApp) : Mr. Arun Kathpalia, Senior Advocate with Mr. Yaman Verma, Ms. Aisha Khan, Mr. Aniket Ghosh, Ms. Parinita Kare, Ms. Bani Brar, Ms. Tahira Kathpalia and Ms. Supritha Prodaturi, Advocates For Meta Platforms, Inc. (Meta) : Mr. RajShekhar Rao, Senior Advocate with Mr. Naval Chopra, Ms. Krithika Ramesh, Ms. Meherunnisa A. Jaitley, Mr. Rajarshi Roy, Ms. Nitika Dwivedi, Ms. Bani Brar and Ms. Supritha Public Version SM Case No. 01 of 2021 and Case Nos. 05 of 2021 & 30 of 2021 2 Prodaturi, Advocates, along with Ms. Ruth Chen and Mr. Rahul Satyan, Representatives of Meta. For Facebook India Online Services Limited (Facebook India) : Mr. Tejas Karia, Mr. Aatmik Jain, Mr. Aakash Kumbhat, Mr. Shashank Mishra and Ms. Supritha Prodaturi, Advocates For Internet Freedom Foundation (IFF) : Mr. Vivek Pandey, Mr. Sasthibrata Panda, Ms. Shreya Kapoor and Ms. Biyanka Bhatia, Advocates. CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Mr. Deepak Anurag Member Order under Section 27 of the Competition Act, 2002 1. In January 2021, the Commission took suo motu cognisance of certain media reports stating that WhatsApp Inc. (now, WhatsApp LLC and hereinafter, referred to as ‘WhatsApp’) has updated its privacy policy and terms of service for its users (Suo Moto Case No. 01 of 2021). It was inter alia reported that the new policy makes it mandatory for the users to accept the terms and conditions in order to retain their WhatsApp account information and provides as to how it will share personalised user information with Facebook Inc. (later renamed as Meta Platforms, Inc. and hereinafter, referred to as ‘Meta’) and its subsidiaries. 2. The Commission observed that since early January 2021, WhatsApp users started receiving notification from WhatsApp informing them about the new changes in Public Version SM Case No. 01 of 2021 and Case Nos. 05 of 2021 & 30 of 2021 3 WhatsApp's terms of service and privacy policies. The text of such notification, as reported in media, is as follows: WhatsApp is updating its terms and privacy policy. Key updates include more information about: • WhatsApp’s service and how we process your data. • How businesses can use Facebook hosted services to store and manage their WhatsApp chats. • How we partner with Facebook to offer integrations across the Facebook Company Products By tapping AGREE, you accept the new terms and privacy policy, which take effect on February 8, 2021. After this date, you will need to accept these updates to continue using WhatsApp. You can also visit the Help Center if you would prefer to delete your account and would like more information. 3. Thus, the above notification suggested that in order to be able to use the services of WhatsApp, from 08.02.2021 onwards, users will have to mandatorily accept the new terms and policy in their entirety including the terms with respect to sharing of their data across all the information categories with other Facebook Companies. As per previous privacy policy(ies) dated 25.08.2016 and 19.12.2019, existing users had an option to choose whether they wanted to share their WhatsApp data with Facebook. However, with the latest update, every WhatsApp user has to mandatorily agree to such data sharing with Facebook. 4. In the meanwhile, the Commission received an Information bearing Case No. 05 of 2021 under Section 19(1)(a) of the Competition Act, 2002 (‘Act’) by Ms. Prachi Kohli (‘Informant’) against WhatsApp alleging contravention of the provisions of Section 4 of the Act. The Commission considered the said Information in its ordinary meeting held on 23.03.2021 and noted that the allegations made by the Informant are substantially same to those, which are the subject matter of Suo Moto Case No. 01 of 2021. Accordingly, in terms of proviso to Section 26(1) of the Act, the Commission decided to club this matter with Suo Moto Case No. 01 of 2021. It was also decided that no separate order or direction is required to be passed on the instant Information and the same shall abide by the decision of the Commission in Suo Moto Case No. 01 of 2021. Public Version SM Case No. 01 of 2021 and Case Nos. 05 of 2021 & 30 of 2021 4 Directions to the Director General (DG) 5. Based on the material available on record, the Commission, vide its order dated 24.03.2021, formed a prima facie view that WhatsApp in the garb of its policy update, has contravened the provisions of Section 4 of the Act through its exploitative and exclusionary conduct, as detailed in the said order. Accordingly, the Commission directed the DG to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act (PF Order). 6. Subsequently, the Commission received another Information bearing Case No. 30 of 2021 against the Opposite Parties filed by Internet Freedom Foundation (IFF). The Commission considered the said Information in its ordinary meeting held on 12.10.2021 and noted that the subject matter of the allegations made in the instant Information was substantially the same as that of Suo Motu Case No. 01 of 2021 which is currently under examination before the DG. Accordingly, in terms of proviso to Section 26(1) of the Act, the Commission, vide its order dated 12.10.2021, decided to club this case with Suo Motu Case No. 01 of 2021. It was also directed that no separate order or further direction is required to be passed on the instant Information and the same shall abide by the decision of the Commission in Suo Motu Case No. 01 of 2021. It was clarified that the scope of the Order dated 24.03.2021 passed under Section 26(1) of the Act, in Suo Motu Case No. 01 of 2021, remains unaltered by virtue of the clubbing of the present matter with Suo Motu Case No. 01 of 2021. 7. The OPs filed Writ Petitions before the Single Judge in Hon’ble Delhi High Court to challenge the aforementioned order dated 24.03.2021 passed by the Commission. The Court vide its order dated 22.04.2021 dismissed the captioned petitions after finding no merit in the petitions and refused to quash the PF Order of the Commission. The OPs filed Letter Patent Appeals No. 163 and 164/2021 before the Division Bench of Hon’ble Delhi High Court against the said Single Judge bench order. The Hon’ble Court vide judgement dated 25.08.2022 dismissed both the LPAs. Aggrieved by the impugned judgment and final order dated 25.08.2022 passed by the Hon’ble Delhi High Court, Public Version SM Case No. 01 of 2021 and Case Nos. 05 of 2021 & 30 of 2021 5 Special Leave Petitions were preferred by the OPs. The Hon’ble Supreme Court vide its judgment dated 14.10.2022 dismissed the SLPs filed by parties. The Court observed that the Commission should not be restrained from proceeding further with the enquiry/investigation for the alleged violation of any of the provisions of the Act.