What Does the NCLAT Ruling Mean for WhatsApp and Meta's Data Sharing Practices?

The NCLAT has partially overturned a CCI ruling against WhatsApp, allowing data sharing with Meta while upholding a ₹213 crore penalty. This decision highlights issues of market dominance and user coercion in data practices. Meta welcomes the ruling, asserting that user privacy remains intact. The implications for digital advertising and competition in the market are significant, as the tribunal emphasizes the need for fair practices in the industry. Read on to understand the full impact of this ruling on WhatsApp and Meta's operations.

By Narendra Chaudhary Nov 4, 2025, 20:01 IST

NCLAT's Decision on WhatsApp's Data Sharing

New Delhi: The National Company Law Appellate Tribunal (NCLAT) provided a partial reprieve to WhatsApp on Tuesday by overturning a segment of a Competition Commission of India (CCI) ruling that prohibited the messaging service from sharing user data with Meta Platforms for advertising for five years. However, the tribunal upheld a hefty penalty of ₹213 crore on Meta.

In its review of the CCI's November 18, 2024, ruling, the NCLAT nullified the directives outlined in paragraph 247.1 of the extensive 158-page document. Nevertheless, the two-member panel confirmed that WhatsApp's 2021 policy represented an abuse of its dominant position, violating Sections 4(2)(a)(i) and 4(2)(c) of the Competition Act.

The NCLAT criticized WhatsApp's 'take it or leave it' approach, which coerced users into accepting broad data-sharing terms without a viable opt-out option.

"The mandatory acceptance of vague data-sharing conditions constitutes coercion and imposes unfair conditions on users," the tribunal stated, emphasizing the violation of Section 4(2)(a)(i).

In response to the ruling, a spokesperson for Meta expressed approval, stating, "We welcome the NCLAT's decision. While we await the written order, we continue to assert that WhatsApp's 2021 privacy policy update did not alter the privacy of users' personal messages, which remain end-to-end encrypted. WhatsApp's optional business features enhance convenience for users, supporting local businesses and contributing to India's digital economy."

The NCLAT's 184-page ruling noted that the data-sharing between WhatsApp and Meta bolstered Meta's position in the display advertising sector, creating barriers for competitors lacking similar access to WhatsApp's data.

"While Meta is not dominant in the market, it is a significant player that has created a situation of market denial, violating Section 4(2)(c)," the tribunal remarked.

However, the NCLAT deemed the CCI's finding of a breach of Section 4(2)(e) as unsustainable, clarifying that Meta did not leverage its dominance in one market to extend its control in another.

The tribunal highlighted that WhatsApp and Meta are separate legal entities, and thus the CCI's directive to cease data sharing for five years was set aside as unsustainable.

The NCLAT upheld the ₹213.14 crore penalty imposed on Meta, stating that it found no flaws in the CCI's penalty calculation methodology.

Although Meta is not dominant in the online display advertising market in India, its actions have led to anti-competitive effects, according to the NCLAT.

The tribunal reiterated that WhatsApp holds a dominant position in the OTT messaging app market in India and has abused this position, justifying the penalty against it.

The NCLAT also noted that Meta exercises full control over WhatsApp's operations, with both companies sharing executives and lacking independent financial statements.

Earlier in September, the NCLAT had reserved its judgment after hearing appeals from Meta and WhatsApp against the CCI's penalties related to WhatsApp's 2021 privacy policy update.

In November of the previous year, the CCI had imposed a ₹213.14 crore fine on Meta concerning the WhatsApp privacy policy update.

Meta and WhatsApp had contested this ruling before the NCLAT, which had previously issued an interim order in January, suspending the five-year ban on data-sharing practices between the two companies.