Do you remember when WhatsApp introduced its new privacy policy and flooded our phones with “Accept or Leave” notifications? It felt like there was no real choice, right? However, Meta Inc, the company behind WhatsApp, overstepped the mark. The company claimed this would improve features and enable better-targeted ads. Nevertheless, users could only accept the update or lose access to their data. Because of this, the Competition Commission of India (“CCI”) imposed a hefty fine of ₹213 crores on Meta for the controversial 2021 privacy policy update. This is not just about money; it is a clear signal to Big Tech: Respect Indian users and their data privacy. However, what does this mean for you? Could it change your WhatsApp chats, Instagram feed, or Facebook memories? In this article, we unpack this step-by-step to understand the implications of this ruling.

The Privacy Policy Debacle

First of all, let’s go through the “Accept of Leave” WhatsApp notifications.

In early 2021, WhatsApp flooded users with notifications about its updated privacy policy. This meant, if you didn’t agree, you could not use the app anymore. The policy required users to share their data with Facebook (now Meta). This move triggered a global outrage against the messaging platform.

Secondly, the timing could not have been worse.

At that time, Facebook was already fighting trust issues due to the Cambridge Analytica incident. In this scandal, the platform was involved in mishandling user data for political campaigns. This update further worsened Meta’s reputation. This prompted many users to switch to other messaging apps like Signal and Telegram.

Lastly, the numbers do not lie.

The shift in user base was dramatic. Signal’s downloads shot up by 4200%, while Telegram gained 25 million new users within three days. Although most people did not abandon WhatsApp entirely, many stayed on reluctantly. It was much like tenants tolerating a difficult landlord because the rent is affordable.

Meta’s mistake thus became a global lesson on the need for transparency and user trust in the digital world.

WhatsApp’s Privacy Policy Under CCI Scrutiny

In January 2021, the CCI launched an investigation into WhatsApp’s updated privacy policy. This investigation began after media reports highlighted how the policy required users to accept data-sharing terms with Facebook and its subsidiaries to continue using the app. Following these changes, there were issues regarding user choice, privacy, and fair competition.

The CCI delivered a decisive judgment against WhatsApp and Meta. It is one of the major steps towards the regulation of tech giants as it warns other companies from exploiting the largest consumer base in the world.

WhatsApp’s Defence

WhatsApp argued that the 2021 policy update sought to improve transparency and enhance user experience. Specifically, the platform has consistently stated that the update does not expand its ability to collect or share data with Meta. The primary goal was to provide users with comprehensible information about their data collection, use, and sharing.

However, this is where it raises eyebrows. The platform clarified that the 2016 update had already disclosed data collection and sharing principles with Meta. The 2021 update was only meant to formalise and record users’ acknowledgement of these existing terms rather than introducing new practices. This was extremely concerning for users since it only forced them to accept the idea that their data had already been disclosed, or rather, compromised.

Furthermore, the platform claimed that the data-sharing policy would improve the user experience by delivering more personalised services and enhanced business tools. Moreover, the platform indicated that private chats would continue to have end-to-end encryption, meaning that policy changes occurred in the context of business communications that are given different privacy terms.  The platform also argued that the update was in line with global data practices, aligned with regional standards and part of the general trend of data management.

CCI’s Observations

The CCI noted several arguments against WhatsApp’s new privacy policy update in 2021. These reflect not only the violation of competition law but also the violation of user rights and market dynamism.

• Abuse of Dominance: Section 4 of the Competition Act, 2002 bars enterprises from abusing their dominant position. With such a huge user base and acting as an essential means of communication, WhatsApp appeared to have violated Section 4. The platform left users no real option but to accept the terms, thereby displaying coercive “take-it-or-leave-it” practices. This is prohibited under Section 4(2)(a).

• Unfair Practices and Imposition: The 2021 update broadened the scope of data collection and sharing by WhatsApp without providing users with an opt-out. However, even users who opted out in 2016 were compelled to either accept the new terms or lose access to the platform. This proved both “imposition” and “unfairness” under competition law.

• Vague Policy Language: The updated privacy policy was heavily criticised for its ambiguity. Terms like “service-related information” and “interactions with others” were broad and open-ended, leaving users uncertain about how their data would be used. Thus, this lack of clarity eroded user trust and violated the principles of informed consent.

• Impact on Market Competition: The data-sharing arrangement allowed Meta to integrate WhatsApp’s data into its broader ecosystem, reinforcing its dominance in digital advertising. Therefore, this led to high entry barriers for competition and suppressed innovation in the market.

• Policy Discrimination: The Director General underlined WhatsApp’s discriminatory treatment, where it gave more rights to EU users than Indian users. The CCI highlighted that though policies differ by law, this disparity shows WhatsApp can do better in terms of providing greater transparency and choice in India.

CCI’s Verdict

The CCI imposed a fine of ₹213 crores on Meta, along with requiring it to:

• Stop sharing data with its platforms, Facebook and Instagram, for advertising purposes for five years; and

• Make its policies clear and give users real choices.

How does this affect you?

The ruling gives every user more control over their personal data. However, it also serves as a reminder to stay vigilant. The investigation revealed that WhatsApp used its dominant position to force users into accepting unfair terms, trapping them in its ecosystem. This “winner-takes-all” strategy damaged user privacy, reduced competition, and strengthened Meta’s control over digital advertising. This, in turn, lowered the privacy standard, which is a precondition for fair competition. This gave Meta an unfair advantage. It is difficult for small competitors not to have access to this data.

This should serve as a wake-up call for Big Tech companies. Like the EU with its data protection laws, India means business in protecting user rights. Irrespective of the size of the company, there are no exceptions.

What to expect next?

As the CCI ruling takes effect, users can expect several changes across Meta’s platforms. Here are a few things that you should keep an eye on.

First, your private chats won’t change. More pop-ups will likely ask you to review and accept updated privacy settings. Ads based on your interactions might still appear, although under stricter rules.

Second, Instagram may continue to feel like it knows you, thanks to data sharing across Meta platforms. Nevertheless, the CCI ruling aims to reduce this, but this will take time before changes show up.

Third, even old Facebook memories might now influence the ads you see. That photo from last year’s holiday? It could shape the next ad in your feed. While the memories remain, advertising will still be a part of the deal.

At the time of publication of this article, the National Company Law Appellate Tribunal (NCLAT) has provided interim relief to Meta by suspending the CCI’s five-year prohibition on WhatsApp data sharing. However, Meta has to deposit 50% of the total fine pending the appeal. The Appellate Tribunal recognised that the prohibition may interfere with WhatsApp’s business model in India. Moreover, the newly passed Digital Personal Data Protection Act, 2023, could provide a solution to data privacy issues. The tribunal will next hear the matter on March 17, 2025.

Conclusion

India is stepping up as a digital guardian, ensuring technology respects user rights. This victory is important for both regulators and users. The message to Big Tech is clear: follow the rules or face penalties. For users, this ruling serves as a call to action. It is important to read privacy policies, adjust your settings, and think carefully before agreeing to terms. For companies like Meta, it is a challenge to balance making money while keeping user trust. Ultimately, building a safer, more transparent digital world starts with each of us. We can protect our data and rights by staying informed and demanding accountability. After all, wouldn’t you want to know who’s using your information and for what?