2025 (12) TMI 1317 - AT - Law of Competition

WhatsApp user data sharing for advertising and other non-essential purposes-clarification allowed requiring express, revocable opt-in/opt-out consent

The dominant issue was whether the regulator's application sought a permissible clarification of the appellate judgment or an impermissible ... Seeking clarification in the conclusion drawn in paragraph 264(c) of this Appellate Tribunal's judgment - obligating Appellants to provide WhatsApp users with an opt-out of data sharing for non-WhatsApp purposes - HELD THAT:- Meta and WhatsApp rely upon Punjab National Bank Vs. Ashish Chhawchharira & Ors. [2023 (5) TMI 16 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] wherein it was held that in the absence of any ambiguity, explaining that “while exercising [its] jurisdiction under Rule 11, [the Hon’ble Tribunal is] not empowered to modify [its] direction as there is no ambiguity or confusion.” And since there is no ambiguity, no clarification application is maintainable and the Appellate Tribunal is prohibited from reviewing the judgment which is in the guise of clarification - the judgmens relate to matters of Insolvency and Bankruptcy Code, 2016, which may not be relevant for a matter relating to Competition Act. Therefore, the judgment is of no assistance to Meta and WhatsApp. Whether in the facts and circumstances of the case, the Applicant is seeking clarification on the judgment or in the guise of clarification it is a review and relitigating the case? - HELD THAT:- The core principle is to remove exploitation by restoring user choice. Users must retain the right to decide what data is collected, for which purposes, and for how long. Any non-essential collection or cross-use (like advertising etc) can occur only with the concerned user's express and revocable consent. The Appellant cannot assert unilateral or open-ended rights over user data. This takes care of the abuse found in 2021 Policy i.e., coercive, take-it-or leave-it consent by re-establishing opt-in/opt-out which will be with desired transparency, and purpose limitation, while still allowing lawful, user- approved uses. Then there is no requirement of these exclusive directions. Section 53(O)(2(f) does not prohibit to consider even review, in a case the clarification goes beyond the limits of clarification and falls within review. Accordingly, to advance the ends of justice, we proceed to consider this application of the Commission for issuing clarification - it is observed that the remedies were classified into two categories, one for sharing of data for advertisement purposes for which 5 years’ ban has been imposed and the other for sharing of data for other than advertising purposes. Both Meta & WhatsApp claim that WhatsApp currently shares user data with Meta from optional features on the WhatsApp service for advertising purposes in limited scenarios and for this reason CCI Application is infructuous. Even in limited scenario that WhatsApp currently shares user data with Meta for advertising purposes – such as CTWA – users are not obliged to use such features - As a consequence of the core principle, if users accept to share data for using optional features, they should also be having option to opt out of data sharing at any stage and in that case they will not be able to use the optional features and this very well aligns with the core principle of data sharing. Thus, it is clarified that “remedial directions contained in Paras 247.2.1 to Paras 247.2.4 of the Applicant's impugned order dated 18.11.2024 will apply to WhatsApp user data collection and sharing for all non-WhatsApp purposes, including non-advertising and advertising purposes” - the application of the Commission allowed. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether the Tribunal had jurisdiction to entertain the application seeking 'clarification', including where the relief may amount to reviewing or correcting its earlier decision. (ii) Whether there existed a mismatch/ambiguity between the Tribunal's findings (reasoning) and the operative conclusions regarding the applicability of remedial directions to advertising-related data sharing, warranting correction/clarification. (iii) Whether, on a proper alignment of findings and operative directions, the remedial directions requiring user choice/optionality and transparency (paras 247.2.1 to 247.2.4) apply to all non-WhatsApp purposes, including advertising; and whether time should be granted for compliance. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Jurisdiction/maintainability to entertain clarification (including review power) Legal framework: The Tribunal considered that the Competition Act expressly confers power on the Appellate Tribunal to review its decisions (Section 53-O(2)(f)). Interpretation and reasoning: The Tribunal rejected the objection that it lacked jurisdiction to revisit its own decision. It held that authorities relied upon to deny such power were from a different statutory context and were not determinative for proceedings under the Competition Act. Given the express statutory power to review, the Tribunal held it was not precluded from examining whether the 'clarification' request was, in substance, seeking a review, and could proceed if required to advance the ends of justice. Conclusion: The Tribunal held it had jurisdiction to entertain the application and was not barred from reviewing/correcting its decision under the Competition Act where warranted. Issue (ii): Existence of mismatch between findings and operative portion warranting clarification/correction Interpretation and reasoning: The Tribunal examined its earlier findings emphasizing the 'core principle' that exploitation is removed by restoring user choice, and that 'any non-essential collection or cross-use (like advertising etc.)' may occur only with the user's 'express and revocable consent,' coupled with transparency and purpose limitation. It contrasted these findings with the operative conclusion which had set aside the direction in para 247.1 'in entirety,' thereby also setting aside wording that excluded the application of para 247.2.1 to advertising-related sharing. The Tribunal found this produced an inconsistency: the operative wording could be read as granting an unintended exception for advertising-related sharing from the transparency/explanation obligation, which would not align with the repeatedly affirmed core principle applicable to non-essential cross-use including advertising. Conclusion: The Tribunal held there was a mismatch between the findings and the operative portion due to an inadvertent inclusion that misaligned the operative directions with the intended reasoning, justifying clarification/correction. Issue (iii): Scope of remedial directions after clarification; applicability to advertising; compliance time Interpretation and reasoning: The Tribunal reasoned that its setting aside of the five-year ban was based on lack of rationale for the duration and because restoring effective opt-in/opt-out, transparency, and purpose limitation makes an absolute, time-bound prohibition redundant. The Tribunal held that its reasoning did not carve out any exception for advertising-related data sharing; rather, advertising was repeatedly treated as an example of 'non-essential' cross-use requiring express and revocable consent. It therefore clarified that deleting the words 'except 247.2.1' from the operative conclusion was necessary to align the operative part with the findings. The Tribunal rejected the contention that this clarification imposed 'additional remedies,' holding it merely brought the operative portion into sync with the already-decided core principle and upheld remedial framework. The Tribunal also held that even where advertising-related sharing arises through optional features, user rights require an ability to opt out at any stage; the Tribunal focused on protecting user choice and preventing unilateral/open-ended assertion over user data. Finally, the Tribunal granted time to implement necessary changes. Conclusions: (a) The remedial directions in paras 247.2.1 to 247.2.4 apply to WhatsApp user data collection and sharing for all non-WhatsApp purposes, including non-advertising and advertising purposes. (b) The operative conclusion is corrected by deleting the words 'except 247.2.1'. (c) Three months' time is granted to comply with the clarified directions.