TaxTMI 
TaxTMI 
2025 (2) TMI 76
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....y, Mr. Aman Shankar, Ms. Biyanka Bhatia, Mr. Sasthibrata Panda and Ms. Shreya Kapoor, Advocates for R3. ORDER Ashok Bhushan, J. IA No.280 of 2025 has been filed in Competition Appeal (AT) No.01 of 2025 filed by WhatsApp LLC praying to stay the effect and operation of the impugned order dated 18.11.2024 passed by the Competition Commission of India (CCI) and to pass any other order that it deems fit and proper in the facts and circumstances of the case. 2. We have heard Learned Counsel for the Appellant and Counsel appearing for the CCI on 16.01.2025 on which date both the Appeals were admitted and parties were heard on the interim relief. 3. Before we enter into respective submissions of the parties on the application for interim relief, a brief background of the facts giving rise to these Appeals are to be noted. 3.1. WhatsApp LLC published its Terms of Service and Privacy Policy in 2012. In April, 2016, WhatsApp announced its end-to-end encryption system for all types of WhatsApp messages and calls. On 20.02.2018, WhatsApp updated its Terms of Service and Privacy Policy of 2016 which was challenged in Delhi High Court by Writ Petition- "Karmanya Singh Sareen vs.....
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.... The submissions advanced by Learned Senior Counsel appearing in both the Appeals being almost similar, we refer to submissions as submissions on behalf of the Appellant. 6. Counsel for the Appellant in support of the Appeal contends that the Commission failed to identify actual anti-competitive effects and instead relied on potential and likely effects whereas law is well settled that actual anti- competitive effects is a prerequisite for a Section 4 violation. It is submitted that the Commission took suo moto cognizance of 2021 update of WhatsApp which 2021 update was challenged before the Hon'ble Supreme Court in SLP filed by Karmanya Singh Sareen against the judgment of the Delhi High Court dated 23.09.2016 dismissing Writ Petition where 2016 privacy policy was challenged. It is submitted that in the said S.L.P, an IA was filed being IA No.6140 of 2021 where prayer was made to stay the 2021 privacy policy dated 04.01.2021 with certain other reliefs including WhatsApp shall not transfer or share any User data or information of Indian WhatsApp Users with Facebook, any other Facebook company. It is submitted that the said application was heard by the Hon'ble Supreme Court and b....
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....pted for 2021 update are being continued with the benefit of service by WhatsApp. There were no reasons for issue directions as contained in paragraph 247.2 of the order of the Commission. Irreparable harm shall be caused to the WhatsApp and its users on five years ban as was imposed by the impugned order in paragraph 247.1. 7. Counsel appearing for the CCI refuting the submissions of the Counsel for the Appellant submits that WhatsApp has challenged the suo moto proceedings initiated by CCI against WhatsApp by filing a Writ Petition which was dismissed by Ld. Single Judge of the High Court on 22.04.2021. LPA filed by WhatsApp was also dismissed by Division Bench of Delhi High Court on 25.08.2022. Against the Division Bench Judgment of the Delhi High Court, a Special Leave Petition to Appeal No.17121 of 2022 and other SLPs were filed which came to be dismissed by the Hon'ble Supreme Court on 14.10.2022. The Hon'ble Supreme Court accepted the submissions of the Commission that proceedings initiated by the Commission is for violation of the provisions of the Competition Act which were within jurisdiction of the Commission. It is submitted that when the Hon'ble Supreme Court dismis....
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....n for users to access WhatsApp Service in India. 247.2.3 In respect of sharing of WhatsApp user data for purposes other than for providing WhatsApp Services, all users in India (including users who have accepted 2021 update) will be provided with: a) the choice to manage such data sharing by way of an opt-out option prominently through an in-app notification; and b) the option to review and modify their choice with respect to such sharing of data through a prominent tab in settings of WhatsApp application. 247.2.4. All future policy updates shall also comply with these requirements. 247.3 The OPs are directed to make necessary changes to comply with above directions within a period of 3 (three) months from the date of receipt of this order and submit a compliance report to the Commission in this regard." 10. The directions in paragraph 247.1 are directions with regard to share of initial data "for advertising purposes" and directions in paragraph 247.2 are with respect to sharing of WhatsApp user data "for purposes other than advertising". Five years' ban have been imposed only with respect to share of user data for advertising purpos....
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.... the matters should be dealt with and taken to the logical end of pronouncement of final orders without any undue delay. In the event of delay, the very purpose and object of the Act is likely to be frustrated and the possibility of great damage to the open market and resultantly, country's economy cannot be ruled out." In view of the above, the CCI should not be restrained from proceeding further with the enquiry/investigation for the alleged violation of any of the provisions of the Act. The Special Leave Petitions stand dismissed. However, it is observed that all the contentions which may be available to the petitioners are kept open to be considered by the CCI in accordance with law and on its own merits and any observations made while initiating the proceedings recorded in para 43 and any observations made by the High Court be considered and treated as tentative/prima facie while initiating the proceedings under the Act and the proceedings shall be decided and disposed of in accordance with law and on its own merits. Pending applications stand disposed of." 12. The above order clearly supports the submissions of the CCI that suo moto proceedin....
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.... Facebook, any other Facebook company or any third party for any purpose; (ii) whatsApp shall not bring into force its new Privacy Policy dated 04.01.2021 for Indian Users. 'Upon such data protection legislation coming into effect, WhatsApp shall be at liberty to approach this Court for modification and/or variation of this undertaking'. (iv) Direct Ministry the of Electronics and Information Technology, Government of India to issue necessary orders to WhatsApp to not to implement its new Privacy Policy and new Terms of Use for Indian Users from 08.02.2021, and to take necessary steps to ensure compliance with such orders, till further orders are passed by this Hon'ble Court." Mr. Kapil Sibal, learned senior counsel appearing for the respondent-WhatsApp would point out letter dated 22nd May, 2021 addressed to the Ministry of Electronics and Information Technology (Meity), Government of India. Therein our attention is drawn to the following portion: "We take seriously the feedback we have received from your agency and want to confirm that WhatsApp will not limit the functionality of how WhatsApp works in the coming weeks as pr....
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.... been taken in the letter dated 22nd May, 2021." 14. The above order clearly indicate that the Hon'ble Supreme Court did not find it feasible to grant interim order staying 2021 privacy policy. We are however, conscious of the fact that refusing to stay privacy policy in the year 2023 by the Hon'ble Supreme Court in SLP filed by Karmanya Singh Sareen at best can indicate that the privacy policy was not stayed by the Hon'ble Supreme Court. However, the Hon'ble Supreme Court had no occasion to consider the suo moto proceedings and breach of provisions of Competition Act 2002, and at best it can be noticed that the privacy policy was not stayed by the Hon'ble Supreme Court in spite of the prayers made before it. 15. Counsel for the Appellants also referred to the Digital Personal Data Protection Act 2023 Gazetted on 11.08.2023 which has not yet been enforced. Counsel for the Appellants submits that the provisions are likely to be enforced within six months as the above statement was made by the Hon'ble Minister. 16. The CCI having after considering the report of the DG and replies submitted by the Appellants and other materials on record found breach of Section 4 of the Compe....