Anshuman
Hello everyone, I am Anshuman Sakle, a Partner in the Competition Law practice at Khaitan & Co. And joining me today is my colleague and partner, Anisha Chand. Today, we will be discussing NLCAT’s ruling on the Meta Privacy Policy case.
Anisha
Hi Anshuman, great to be here and looking forward to our discussion on this important judgment!
Anshuman
On 4th November 2025, the National Company Law Appellate Tribunal or NCLAT delivered its landmark judgment providing partial relief to WhatsApp and Meta in the 2021 Privacy Policy update case. The NCLAT set aside the Competition Commission of India or CCI’s 5-year ban on data sharing between WhatsApp and Meta for advertising purposes but upheld the INR 213 crores (~USD 25 million) penalty for abuse of dominance. The judgment clarifies the interplay between competition law and data privacy, emphasising that both frameworks are complementary, and addresses key issues like zero-price market economics, informed consent, and jurisprudence on data-driven digital markets.
This ruling has become a landmark judgement because it reshapes how we look at privacy through the lens of competition law. To understand why this case mattered so much, let’s take a step back to where it all began.
Anisha
Exactly. Let’s rewind for a moment.
The entire dispute started with WhatsApp’s 2021 Policy update. Simply put, WhatsApp told its users: either agree to a broader data sharing arrangement with all Meta companies or stop using WhatsApp altogether.
It was a classic “take it or leave it” scenario. And India’s competition regulator, the CCI, found this to be an abuse of dominant position. They believed WhatsApp was leveraging its enormous user base, to push users into terms, that benefitted Meta’s advertising business. As one would imagine, Meta pushed back, arguing that privacy issues should fall under India’s new data protection law that is the DPDP Act and not competition law.
Anshuman
And that’s where the NCLAT stepped in. The appellate court clarified something crucial: competition law and data protection law aren’t rivals—they’re complementary.
Data protection laws protect the individual’s right to privacy, while competition law intervenes when a dominant company uses data in a way that harms the competitive landscape.
Anisha
And that’s a big signal, right. Especially now that India’s DPDP Act is finally in force. In fact, many expected competition law to step away from privacy issues, but NCLAT sided with the CCI and upheld its intervention as valid and important, particularly when privacy practices shape market behaviour. Now, once the court accepted that privacy and competition issues can overlap, the next big question was…How do you treat data in a market where the service is free?
Anshuman
Exactly. And that takes us to a major theme: zero-price markets.
WhatsApp is free to use—but not really free. Users pay with their data, and NCLAT made that absolutely clear. The court recognized that in digital platforms where no money exchanges hands, data becomes the actual price. It’s the new currency.
Meta argued: “But we didn’t increase any monetary price!” The Court responded: “Price isn’t just money—unfair data demands can also be an exploitative price.” By forcing users to hand over more data than necessary just to keep using the app, WhatsApp was essentially charging a higher non-monetary price.
Anisha
Absolutely. The NCLAT also noted that in data-driven markets, services are offered “free” to attract users, but the real value lies in the data collected. The NCLAT noted that ‘abuse’ of dominance includes non-price factors as well, which apply equally to zero-price markets where users effectively “pay” with data.
And the Court called this out as coercive consent.
The 2021 update didn’t offer an opt-out, unlike earlier updates. And because WhatsApp is deeply embedded in India’s communication ecosystem, users realistically had no exit. This mandatory sharing undermined free and informed consent, especially given WhatsApp's dominance which, as per the Tribunal, justified regulatory intervention. In other words, you technically have a choice, but practically you don’t—and that’s exactly where the abuse of dominance comes in. Once the Court addressed consent and data, it turned to another key competition law question……where exactly is Meta dominant?
Anshuman
Let’s break down the markets.
The Tribunal agreed with the CCI on two relevant markets:
OTT messaging services in India
Online display advertising in India
Anisha
Meta tried to broaden the scope, suggesting a “market for user attention” or treating all advertising—online, offline, search, display—as one big market.
But the NCLAT rejected that because each service works differently.
Messaging is not interchangeable with gaming.
Display ads don’t function like search ads.
Anshuman
And that clarity really helps. Though, interestingly, the Tribunal disagreed with CCI on Meta’s dominance in the display advertising market—largely because Google still remains a formidable competitor.
Anisha
Right. So Meta was not held dominant in the advertising market, and the “leveraging” charge was dropped. But the Court still recognized that WhatsApp’s data-sharing policy could skew the ad market unfairly.
And this isn’t happening in isolation in India…
Anshuman
Exactly. What’s striking is how the NCLAT linked this to global trends. Around the world—in the EU, the US—regulators are treating data misuse as a competition issue, not just a privacy matter.
Anisha
Absolutely. Authorities are increasingly recognizing that data is a form of market power. And when misused, it can create competitive harm. India’s approach now aligns closely with these global enforcement patterns.
So, after weighing all these factors, where did the Court finally land?
The Appeals Court upheld the penalty—confirming WhatsApp/Meta’s conduct was coercive and an abuse of dominance. But when it came to the 5-year ban on data sharing with the Meta companies, the Court took a more measured approach.
It found the ban too broad and too restrictive, potentially harming Meta’s normal operations more than solving any competitive issue.
So the message is – Punishment must be proportionate—not crippling.
Anshuman
And that final ruling sends powerful signals to all digital platforms in India—whether you’re in chat, e-commerce, payments, or fintech:
Privacy Policy = Competition Issue
If you’re dominant, your privacy terms must be fair, proportionate, and transparent.
Consent Must Be Real
You cannot force users into data sharing by exploiting your market power.
Compliance Must Be Built-In
Companies need privacy and competition checks inside their product and business strategies—not as afterthoughts.
Anisha
Yes - this judgment sets a strong precedent. It makes clear that digital giants, must comply with both privacy law and competition law—simultaneously. The core message is clear: if an enterprise is dominant, its consent mechanisms must be truly informed and non-coercive, and its data sharing must not be disproportionate to the service offered.
Anshuman
It’s a meaningful step towards a more balanced and trustworthy digital ecosystem in India.
Thank you for joining me today, Anisha.
Anisha
Thank you, Anshuman and thank you to our listeners for tuning in.
