NCLAT rules WhatsApp must obtain user consent for all data collection and sharing

The Hindu
The Hindu
14h ago
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NCLAT mandates WhatsApp obtain user consent for all data collection and sharing, including advertising, with a compliance deadline of three months.
NCLAT rules WhatsApp must obtain user consent for all data collection and sharing
A What happened
The National Company Law Appellate Tribunal (NCLAT) addressed an application from the Competition Commission of India (CCI) about WhatsApp’s data-sharing practices. The tribunal clarified that WhatsApp and Meta Platforms cannot assert unilateral rights over user data for any purpose, including advertising. Users must have clear, revocable consent rights for data collection, usage, and sharing. The ruling extends beyond WhatsApp’s platform data to any third-party uses. NCLAT gave WhatsApp a three-month deadline to comply with changes that protect user autonomy, citing issues with WhatsApp’s 2021 policy. This decision follows a prior partial stay on a five-year ban imposed by the CCI and a ₹213 crore penalty upheld against WhatsApp for abusing market dominance and breaching privacy norms. NCLAT also analyzed Meta's market power in digital advertising, but found separate legal entities prevented extending dominance conclusions between WhatsApp and Meta beyond certain limits.
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Key insights

  • 1

    User Consent as a Non-Negotiable Data Right: The ruling establishes user consent as an explicit, revocable right for all data uses, setting a legal precedent that limits platform overreach in data collection and use.

  • 2

    Regulatory Agencies Tightening Oversight on Data Sharing: The case signals intensifying regulatory scrutiny on big tech companies’ cross-platform data sharing, especially in digital advertising markets, raising barriers for dominant firms.

  • 3

    Legal Separation Limits Dominance Leverage Between Meta and WhatsApp: Despite shared ownership, NCLAT recognized WhatsApp and Meta as separate legal entities, complicating regulatory arguments around market dominance spillovers across platforms.

Takeaways

The NCLAT ruling clarifies data privacy boundaries and reinforces user control over personal data across platforms, with tangible compliance timelines for WhatsApp.

Topics

World & Politics Policy & Regulation