The Competition Commission of India has 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 CCI observed that the privacy policy terms on sharing of personalized data with Facebook companies were ‘neither fully transparent nor based on the specific, voluntary consent of users’.
“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 regulator ordered the probe on its own accord for alleged violations relating to abuse of dominance and entering into agreements that stifle competition. It noted that it was reported in media that WhatsApp’s updated privacy policy and terms of service force users to accept the terms.
CCI asked its director-general of investigation to complete the probe in two months, the order uploaded on its website showed.
It said that WhatsApp’s notification to users suggested that to be able to use the services of the platform from 8 February onwards, users will have to mandatorily accept the new terms and policy in their entirety, including sharing of their data across all information categories with other Facebook companies.
Unlike previous privacy policy versions of August 2016 and December 2019, every WhatsApp user has to mandatorily agree to such data sharing with Facebook, CCI noted.
Under the competitive market conditions, CCI said, users would have sovereign rights and control over decisions related to sharing of their personalized data. However, it is not the case with WhatsApp users and moreover, there appears to be no justifiable reason as to why users should not have any control or say over cross-product processing of their data by way of voluntary consent, and not as a precondition for availing WhatsApp’s services.
It said 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 WhatsApp users.
Given the pronounced network effects it enjoys, and the absence of any credible competitor in the instant messaging market in India, WhatsApp appears to be in a position to compromise quality in terms of protection of individualized data and can deem it unnecessary to even retain the user-friendly alternatives such as ‘opt-out’ choices, without the fear of erosion of its user base.
Further, the regulator alleged that WhatsApp has prima facie breached the provisions of Section 4 of the Act (dealing with abuse of dominance) through “its exploitative and exclusionary conduct, in the garb of a policy update.”
A thorough and detailed investigation is required to ascertain the full extent, scope, and impact of data sharing through involuntary consent of users said the CCI order.
Meanwhile, a spokesperson for WhatsApp said the company was committed to protecting users’ personal communications. “We look forward to engaging with the CCI. WhatsApp remains committed to protecting people’s personal communications with end-to-end encryption and providing transparency about how these new optional business features work,” the WhatsApp spokesperson said.
WhatsApp’s data sharing with other Facebook products indicate the intended use of building user profiles through cross-linking of data collected across services, the regulator said, adding that such data concentration may itself raise competition concerns where it is perceived as a competitive advantage.
