In a significant development, the Competition Commission of India on Wednesday ordered a probe into the new privacy policy of WhatsApp, after making a prima facie observation that it was violative of the Competition Act 2000.
‘..the Commission is of the considered opinion that WhatsApp has prima facie contravened the provisions of Section 4 of the Act through its exploitative and exclusionary conduct, in the garb of policy update’, said the order passed by the CCI.
The CCI observed that the privacy policy terms on sharing of personalised data with Facebook companies was ‘neither fully transparent nor based on specific, voluntary consent of users’.
‘On a careful and thoughtful consideration of the matter, the conduct of WhatsApp in sharing of users’ personalised data with other Facebook Companies, in a manner that is neither fully transparent nor based on voluntary and specific user consent, appears prima facie unfair to users.
The purpose of such sharing appears to be beyond users’ reasonable and legitimate expectations regarding quality, security and other relevant aspects of the service for which they register on WhatsApp. One of the stated purposes of data sharing viz. targeted ad offerings on other Facebook products rather indicates the intended use being that of building user profiles through cross-linking of data collected across services. Such data concentration may itself raise competition concerns where it is perceived as a competitive advantage’, the 21-page order of the CCI said.
It made a prima facie observation that the policy was an abuse of dominant position resulting in violation of Section 4 of the Competition Act.
‘The impugned conduct of data-sharing by WhatsApp with Facebook apparently amounts to degradation of non-price parameters of competition viz.quality which result in objective detriment to consumers, without any acceptable justification.
Such conduct prima facie amounts to imposition of unfair terms and conditions upon the users of WhatsApp messaging app, in violation of the provisions of Section 4(2)(a)(i) of the Act’.
The anti-trust regulator termed the privacy policy terms ‘take-it-or-leave-it’ terms set by a dominant messaging platform, without providing much information to the users, and observed that the policy prima facie appeared to be ‘unfair and unreasonable’.
‘..users are required to accept the unilaterally dictated ‘take-it-or-leave-it’ terms by a dominant messaging platform in their entirety, including the data sharing provisions therein, if they wish to avail their service. Such ‘consent’cannot signify voluntary agreement to all the specific processing or use of personalised data,as provided in the present policy.
Users have not been provided with appropriate granular choice, neither upfront nor in the fine prints,to object to or opt-out of specific data sharing terms,which prima facie appear to be unfair and unreasonable for the WhatsApp users’.
The CCI bench comprising Ashok Kumar Gupta(Chairperson), Sangeeta Verma(Member) and Bhagwant Singh Bishnoi(Member) observed that ‘a thorough and detailed investigation is required to ascertain the full extent, scope and impact of data sharing through involuntary consent of users’.
Accordingly, the Commission directed the Director General (‘DG’) to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act. The Commission also directed the DG to complete the investigation and submit the investigation report within a period of 60days from the receipt of this order.
