Meta fined $25.4 million in India over WhatsApp privacy policy controversy

In January 2021, WhatsApp introduced a privacy policy update that expanded its scope of data collection and sharing with other Meta companies. The update, which was mandatory for users in India but optional in the European Union due to stricter privacy laws, sparked significant backlash, according to Indian Express.

Many users migrated to rival platforms like Signal and Telegram, and the Competition Commission of India (CCI) launched an investigation into the matter, citing concerns over unfair practices and abuse of market dominance.

The controversy deepened as Meta and WhatsApp challenged the investigation in the Delhi High Court, arguing that the issue was already under judicial scrutiny. However, in 2022, the court dismissed their appeals, stating that WhatsApp's dominance and "lock-in effect" prevented users from easily shifting to alternative platforms despite dissatisfaction.

Now, nearly three years later, the CCI has imposed a Rs 213.14 crore (~$25.4 million) penalty on Meta, concluding that the 2021 privacy policy update violated competition laws.

According to the CCI, the policy’s “take-it-or-leave-it” implementation imposed unfair conditions on users. The Commission also found that sharing WhatsApp user data with Meta companies created barriers for competitors in the display advertising market and denied market access to rivals.

To address these issues, the CCI has mandated several behavioural remedies. For the next five years, WhatsApp is prohibited from sharing user data for advertising purposes unrelated to the messaging service.

Moreover, the platform must provide detailed explanations about the types of data shared and their specific purposes. Users in India must also be given an opt-out option prominently displayed through in-app notifications, including for those who have already accepted the 2021 update.

Meanwhile, Meta has announced plans to appeal the CCI ruling, maintaining that the 2021 update was intended to increase transparency around data collection and usage while introducing optional business features. The company has also reiterated that no users were penalized for not accepting the policy and that WhatsApp remains a vital platform for businesses and government services in India.

This penalty marks a significant regulatory action against Meta in one of its largest markets, highlighting growing scrutiny over how tech giants handle user data.

With over 500 million users in India, WhatsApp's dominant position in messaging and advertising is now under intense review. Meta’s ability to navigate these restrictions while maintaining user trust and market share will be closely watched.