Office Location

Delhi:

E-5, 2nd Floor, Defence Colony
New Delhi - 110024
Tel : 011-24336744

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Mumbai:

Office No. 1410, 14th Floor, Maker Chamber V, Nariman Point, Mumbai
Tel : +91 22-22873499

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Gurgaon:

Level 18, One Horizon Center, Golf Course Road, DLF Phase 5, Sector 43, Gurgaon 122002, India
Tel : +91 124 668 8146 / +91 124 668 8147

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Mumbai (Entertainment and Media Practice)

Office No. 213, 2nd Floor, A-wing, Crystal Plaza, Andheri Link Road, Andheri (W), Mumbai.
Tel : 022-62360762

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Mumbai (Corporate and Transactional Practice)

909/A, Capital Building, Bandra Kurla Complex, East Mumbai- 400098

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Bangalore:

21/2, 1st Main Road,
Opp Indian overseas Bank,
Gandhinagar,
Bengaluru - 560009

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Kanpur:

77A, Cantt., Kanpur - 208004

CCI FAVOURS WHATSAPP

In a recent judgment dated 01.06.2017, the Competition Commission of India (CCI) has ruled in favour of WhatsApp in a complaint alleging abuse of its dominant position in the Indian instant messaging market.

The informant Vinod Kumar Gupta alleged that WhatsApp was contravening Section 4 of the Competition Act by sharing user information with its parent company Facebook, and by indulging in predatory pricing.

As regards the first allegation, the informant, appearing in person, submitted that users of WhatsApp were forced to share their account details and other information with Facebook as per a change in its privacy policy.

He also pointed out that this information is being used by Facebook for targeted advertisements. The manner by which consent was obtained from the users was, according to the informant, deceptive. He further submitted that the majority of WhatsApp users in India are not equipped to even read, let alone comprehend the terms and conditions.

Therefore, he sought a ruling from the CCI prohibiting the Opposite Party from sharing users’ data with Facebook and directing them not to discontinue services to those users who have not agreed to the change in the privacy policy.

Gupta also alleged that by not charging any subscription fees, WhatsApp was indulging in predatory pricing, and hence, abusing its dominant position in the market. Further, he alleged that the conduct of the company was in contravention of the IT Act and impinged upon the Right to Privacy.

In trying to ascertain whether WhatsApp was contravening Section 4, the Commission concluded that they were in a dominant position in the relevant market, defined as ‘the market for instant messaging services using consumer communication apps through smartphones in India’.

However, the CCI did not agree that the Opposite Party was abusing its dominant position. The Commission observed, “It is noted that the OP provides the option to its users to ‘opt out’ of sharing user account information with ‘Facebook’ within 30 days of agreeing to the updated terms of service and privacy policy.

Moreover, the OP has submitted that ‘Facebook family of companies’ will use such information for the purpose of improving infrastructure and delivery systems, understanding how their services are used, securing systems, and fighting spam, abuse or infringement activities…

…Further, as stated in the key updates summary of the OP, nothing a user shares on ‘WhatsApp’, including his/ her messages, photos, and account information, will be shared onto ‘Facebook’ or any other apps of ‘Facebook family of companies’…”

On the issue of predatory pricing, the Commission noted that other similar applications were also offering their services for free.

“In this regard, the Commission observes that there are several other applications available in the relevant market which do not charge any fee from the users for availing their services for instance, Hike, Messenger and Viber are also available for free. It appears to be the standard practice in the industry/ business that all consumer communication apps are not charging any fee from the users.”

On the subject of the right to privacy, the Commission noted that this issue was being considered by the Supreme Court in the Justice Puttuswamy case, as pointed out by the Delhi High Court in Karmanya Singh Sareen and Others v. Union of India and Others. Therefore, the CCI held that the allegations of breach of the IT Act, 2000 “do not fall within the purview of examination under the provisions of the Act”.