In a brief reprieve for Meta Platforms, India’s National firm Law Appellate Tribunal (NCLAT) lifted a five-year prohibition on data exchange between WhatsApp and its parent firm, Meta. According to Reuters, the suspension provides relief to the United States-based internet giant, which had raised concerns about the ban’s impact on its advertising business and overall operations in India.
Meta previously informed the appeals panel that it may have to “roll back or pause” some services, such as those that would allow an Indian fashion company to personalize ads on Facebook or Instagram based on their contact with a WhatsApp user.
However, the panel warned that the ban “may lead to the collapse” of WhatsApp’s business model. An Indian panel has temporarily delayed a five-year data sharing prohibition between WhatsApp and its owner Meta Platforms, providing significant comfort to the US company, which had warned that its advertising revenue would be impacted.
Meta has appealed to the CCI’s November decision, which prevented WhatsApp from exchanging user data between WhatsApp and with other Meta businesses for targeted advertising purposes, warning that it could have to scale back some capabilities. Meta contended that the CCI lacked the “technical expertise” to properly comprehend the ramifications of its decision, and warned that the order could compel the company to reduce or suspend elements critical to its services. According to Reuters, Meta warned the tribunal that the prohibition “may lead to the collapse” of WhatsApp’s economic model, which is based on data-driven customisation.
The NCLAT’s decision to temporarily suspend the ban comes as the tribunal considers Meta’s appeal against the CCI’s antitrust decision. This development is especially noteworthy given Meta’s massive user base in India, which includes over 500 million WhatsApp users and more than 350 million Facebook users.
On Thursday, India’s National Company Law Appellate Tribunal suspended the data sharing prohibition while it hears Meta’s case to the antitrust verdict.
The ban “may lead to the collapse” of WhatsApp’s business model, the panel stated.
India is Meta’s largest market, with over 350 million Facebook users and over 500 million WhatsApp users.
Facebook’s registered firm in India that sells advertising, Facebook India Online Services, recorded revenue of $351 million in 2023-24, the highest in at least five years.
A Meta spokeswoman stated that the verdict was appreciated and that the company “will evaluate next steps.” The CCI did not immediately respond to a request for comment on the ruling, though the watchdog can appeal the decision to the Supreme Court if necessary.
In 2021, following complaints of WhatsApp’s privacy policy revisions. WhatsApp was accused of breaking European Union legislation by neglecting to clarify policy changes in plain and understandable language. It later agreed to clarify the modifications for EU users. The CCI ruled in November that WhatsApp’s rules compelled users to accept the modification or risk losing access to the service.
This issue is similar to another high-profile legal challenge that WhatsApp encountered in the European Union. In 2021, the corporation was accused of violating EU laws by failing to clearly communicate policy changes to users. It eventually decided to make its terms clearer for European users.
Meta has claimed that the adjustments were only to provide information about how optional corporate messaging features work and did not enhance its data collecting and sharing capabilities.
In November, however, the watchdog ruled that WhatsApp allows users to choose whether or not to share data with Meta.
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