Dominant digital platform scrutiny extends to mandatory data-sharing terms that may lower quality and create exclusionary effects.

CCI considered whether preliminary objections based on pending proceedings elsewhere and alleged inapplicability of competition law barred scrutiny of a messaging platform's revised terms. It rejected those objections, holding that competition inquiry is not excluded by parallel proceedings and may address conduct about to be implemented. On the merits, it found the platform dominant in the relevant OTT messaging market, noting network effects, user lock-in, and weak substitutability. The updated policy was viewed as imposing mandatory, broad and opaque data-sharing terms without voluntary, specific consent, and as potentially lowering service quality and creating exclusionary effects in adjacent markets. A prima facie abuse of dominance was found and investigation was directed.

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Issues: (i) Whether the preliminary objections based on alleged sub judice proceedings and the asserted inapplicability of competition law warranted rejection of the proceedings; (ii) Whether the updated terms of service and privacy policy of the messaging platform disclosed a prima facie abuse of dominant position by imposing unfair and potentially exclusionary data-sharing conditions.

Issue (i): Whether the preliminary objections based on alleged sub judice proceedings and the asserted inapplicability of competition law warranted rejection of the proceedings.

Analysis: The objections were rejected. The proceedings before other fora did not oust scrutiny under competition law because the inquiry was confined to competition effects, and the Act operates in addition to other laws. The Commission also held that the matter had already crystallised by reason of the announced policy update and that the authority could act even in respect of conduct about to be committed.

Conclusion: The preliminary objections were rejected.

Issue (ii): Whether the updated terms of service and privacy policy of the messaging platform disclosed a prima facie abuse of dominant position by imposing unfair and potentially exclusionary data-sharing conditions.

Analysis: The Commission treated the messaging platform as dominant in the relevant market for over-the-top messaging apps through smartphones in India, relying on network effects, user lock-in, and weak substitutability. It found that the revised policy removed the earlier opt-out choice and required users to accept broad and opaque data-sharing terms as a precondition to continued use. The policy was considered take-it-or-leave-it in nature, lacking voluntary and specific consent, and was viewed as potentially degrading quality as a non-price competitive parameter while also creating possible exclusionary effects through data concentration and leverage into adjacent markets.

Conclusion: A prima facie contravention of Section 4 of the Competition Act, 2002 was found.

Final Conclusion: The matter was directed for investigation by the Director General on a prima facie view that the policy update may amount to unfair and exclusionary abuse of dominance.

Ratio Decidendi: A dominant digital platform may attract scrutiny under competition law where non-transparent, mandatory data-sharing terms imposed without voluntary and specific user consent potentially reduce quality, exploit users, and produce exclusionary effects in adjacent markets.

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