New Delhi, Nov. 5 -- The National Company Law Appellate Tribunal (NCLAT) upheld the Rs.213 crore penalty on Meta Platforms and WhatsApp, finding that the Competition Commission of India (CCI) had correctly established abuse of dominance and imposed a proportionate fine. "The penalty imposed of Rs.213.14 crore only (Rupees Two Hundred Thirteen Crores and Fourteen Lakhs only) upon Meta is upheld," the judgment noted. The tribunal agreed that WhatsApp's 2021 privacy policy forced users to accept expanded data-sharing terms without real choice, violating Section 4(2)(a)(i) of the Competition Act, which prohibits dominant firms from imposing unfair conditions. It also noted that Meta and WhatsApp operate under common ownership and control, justifying a joint penalty. However, the NCLAT said the five-year ban lacked reasoning and was legally unjustified. It observed that restoring user consent and opt-in/opt-out choice sufficiently addresses the coercive elements of the 2021 policy. "Once users have been given the option to freely decide to opt in or opt out.this direction becomes redundant," the judgment stated. Lawyers described the verdict as balanced and nuanced. "The NCLAT has struck a fine balance in the WhatsApp and Meta case. By lifting the data-sharing ban and setting aside the dominance finding, it shields their business model. Yet by upholding the Rs.213 crore penalty, it reminds Big Tech that fairness and transparency are now central to competition law," said Ketan Mukhija, senior partner, Burgeon Law. "This nuanced verdict reinforces that while dominance itself is not unlawful, leveraging it without informed user consent can still attract competition scrutiny," he added. According to Raheel Patel, partner at Gandhi Law Associates, the ruling indicates that competition cases should be based on clear evidence of market harm, rather than merely concerns about data or privacy. He said the decision may give tech companies more confidence to challenge broad claims of dominance and encourage CCI to adopt a more evidence-based approach in handling digital market cases. The case arose from WhatsApp's January 2021 privacy policy update, which required users to accept new terms allowing the app to share certain data, such as device information, business interactions, and usage details, with its parent company, Meta (then Facebook). WhatsApp said the update aimed to help businesses communicate with customers and improve ad services on Facebook and Instagram. However, users had to accept these terms to continue using the app, sparking global backlash over privacy concerns and allegations that WhatsApp was forcing people to share their data. India's competition watchdog held that the policy was exploitative and exclusionary conduct, unfairly strengthening Meta's position in digital advertising by leveraging WhatsApp's dominant presence in the messaging market. In its November 2024 order, CCI fined Meta and WhatsApp Rs.213.14 crore, prohibited them from sharing user data with Meta or its affiliates for five years, and directed them to disclose the specific purpose behind each category of data collected. Meta challenged the order before NCLAT. In January, the appellate tribunal granted partial interim relief, lifting the five-year data-sharing ban but requiring Meta to deposit 50% of the fine, in addition to the 25% already paid. The refund was made subject to the final verdict. During the hearings, Meta argued that CCI had misapplied competition law to what was essentially a data protection issue. It maintained that the 2021 update did not broaden WhatsApp's data collection beyond the 2016 policy but merely clarified existing categories. The company emphasized that no sensitive user data was shared with Meta for advertising and that features such as 'Click to WhatsApp' were optional....