Bengaluru, Nov. 5 -- The National Company Law Appellate Tribunal (NCLAT) on Tuesday upheld a Rs.213.14 crore penalty imposed on WhatsApp and its parent company Meta Platforms Inc for abusing their dominant market position through the messaging platform's 2021 privacy policy update, but set aside a five-year ban on data sharing for advertising purposes. A bench comprising NCLAT chairperson justice Ashok Bhushan and technical member Arun Baroka at the tribunal's principal seat in New Delhi agreed with the Competition Commission of India's (CCI) findings that WhatsApp's 2021 privacy update forced users into data sharing across Meta's platforms. The tribunal found that WhatsApp's "take-it-or-leave-it" policy deprived users of meaningful consent, eroded privacy as an essential aspect of service quality, and created barriers for rival platforms in the online advertising ecosystem, violating Sections 4(2)(a)(i) and 4(2)(c) of the Competition Act. However, the NCLAT set aside the CCI's finding under Section 4(2)(e) relating to leveraging of dominance, where the regulator had held that Meta used WhatsApp's data advantage in the messaging market to expand its position in online display advertising. "The plea is allowed only to the extent of the findings of the Commission in so far as it holds breach of Section 4(2)(e) of the Act and to setting aside the directions in paragraph 247.1 (the ban on WhatsApp sharing data with other Meta companies). The rest of the order dated 18.11.2024 is upheld," the NCLAT said. The dispute stems from WhatsApp's January 2021 announcement of revised terms of service and privacy policy, which came into effect on February 8 that year. The CCI took suo motu cognisance of the change and in November 2024 imposed the penalty, ruling that the policy's "broad and vague" data-sharing terms amounted to abuse of dominance. The regulator had also barred WhatsApp from sharing user data with other Meta companies for advertising purposes for five years. "WhatsApp will not share user data collected on its platform with other Meta Companies or Meta Company Products for advertising purposes, for a period of 5 (five) years from the date of receipt of this order," the CCI had said in its order. WhatsApp and Meta immediately challenged the order before the NCLAT. The appellate tribunal stayed the five-year data-sharing ban in January 2025 and directed Meta to deposit 50% of the penalty amount pending the outcome of the case. During hearings, senior advocate Balbir Singh, representing the CCI, argued that WhatsApp's 2021 privacy policy was coercive and anti-competitive. He told the tribunal that by removing users' ability to opt out of cross-platform data sharing - an option available under its 2016 policy - WhatsApp had effectively forced compliance. "The 2021 update left users with no real choice. The 'take it or leave it' approach created undue urgency and stripped users of autonomy," Singh told the NCLAT. WhatsApp and Meta, represented by senior advocates Mukul Rohatgi, Kapil Sibal and Arun Kathpalia, countered that the CCI had no empirical data, user surveys, rival metrics or user testimonies to support its conclusion that WhatsApp abused its dominant position....