NCLAT Stays CCI's Ban on WhatsApp-Meta Data Sharing for Ads

The National Company Law Appellate Tribunal has halted a five-year ban and a hefty penalty imposed by the Competition Commission of India on Meta, over data-sharing practices between WhatsApp and Meta entities. The decision offers temporary relief while highlighting the need for ex-ante regulations.

The National Company Law Appellate Tribunal (NCLAT) on Thursday granted a stay on a five-year ban and a Rs 213 crore penalty imposed by the Competition Commission of India (CCI) on Meta, scrutinizing its data-sharing practices involving WhatsApp for advertising purposes. The ruling temporarily relieves the tech conglomerate from restrictions that were challenging its business model.

Meta, the company owning WhatsApp, faced the CCI's directive in November 2024, which accused it of unfair practices by compelling user consent for extensive data collection and sharing. The NCLAT's decision requires Meta to deposit 50% of the disputed penalty within two weeks while awaiting the next hearing set for March.

The tribunal emphasized that the imposed ban could destabilize WhatsApp's business model, which provides free services to users. Meta expressed gratitude for the ruling, committing to evaluate further steps to support businesses relying on its platforms. As legal and regulatory changes loom, new ex-ante regulations are being considered to prevent abuse by dominant digital entities.

(With inputs from agencies.)