Meta Tells NCLAT—CCI Has Not Identified Conduct That Denied Market Access to Rivals

1. Background: The CCI Case Against Meta & WhatsApp

• In 2024, the Competition Commission of India (CCI) issued a decision finding Meta Platforms (owner of Facebook, WhatsApp, Instagram etc.) in violation of competition law in India for what it defined as abuse of dominance.
• Central to CCI’s case was WhatsApp’s 2021 privacy policy update. The update allowed certain data sharing from WhatsApp to other Meta entities, which CCI claimed could dilute user privacy, potentially impose conditions, and affect competition in the online display advertising market.
• CCI imposed a penalty of Rs. 213.14 crore on Meta, directed behavioral remedies and regulatory measures.

Meta and WhatsApp have challenged both the penalty and the remedies before the National Company Law Appellate Tribunal (NCLAT), arguing that the CCI’s order is legally flawed, based on hypothetical / speculative harm rather than actual impact.

2. What Exactly is Meta’s Argument in NCLAT?

Meta’s key arguments include:

• No actual conduct identified that denied market access to rivals. They insisted CCI has failed to point to specific actions by Meta that blocked competitors from entering or operating in the online display advertising market.
• The case relies on hypothetical scenarios and future possibilities rather than proven, present or past conduct under Section 4(2)(c) of the Competition Act.
• The market definition is too narrow (limited to “online display advertising”), excluding other substitutable forms like online search advertising, offline advertising, etc. Meta argues that CCI ignored many advertisers that view those markets as substitutable.
• Behavioural remedies, such as a 5-year ban on certain data-sharing, are arbitrary and not justified, especially when CCI has not shown necessary causes and effects.

3. Relevant Legal Provisions: Section 4 of the Competition Act, Dominance & Abuse

To understand the case, one must look at key legal provisions:

• Competition Act, 2002 — Section 4 deals with abuse of dominance. It requires that a firm have dominant position in a relevant market, and then that dominance must be abused in a manner that causes harm (including by denying market access, imposing unfair terms, limiting production, etc.).
• Section 4(2)(c) specifically pertains to “denial of market access” as one form of abuse. But for a finding under 4(2)(c), there needs to be evidence of an act that actually denies or limits opportunities to competitors to access the market.
• “Relevant market” definition is critical — market definition impacts both dominance determination and whether the alleged act could cause anti-competitive effects.

Meta’s lawyers argue that CCI has not satisfied these standards: no showing of real denial of market access; no evidence of substantial exclusion or foreclosure; market improperly defined.

4. Privacy Policy Update of 2021: What Changed and What’s at Issue

• WhatsApp updated its privacy policy in 2021, which among other things, clarified or expanded data sharing with other Meta entities for business / advertising features.
• Specific features like “Click-to-WhatsApp Ads” (businesses using WhatsApp as a channel via Meta’s platforms) are optional, per Meta’s presentation.
• Meta contends that there was no change to the core privacy promises for personal messages / end-to-end encryption; that the update was more about disclosure and optional business features.

5. Market Definition: CCI vs Meta

This is foundational, because dominance and abuse depend heavily on how the “relevant market” is defined.

• CCI’s Definition: CCI treated the relevant market narrowly as online display advertising. This means advertisers placing display ads over the internet, possibly ignoring other forms of advertising (search, offline) which may compete for the same ad budgets.
• Meta’s Claim: Meta argues this is overly narrow. They claim:
  1. Search advertising is substitutable with display advertising for many advertisers;
  2. Offline advertising still competes for marketing budgets;
  3. CCI did not sufficiently investigate advertiser preferences or substitution patterns.
• Meta says CCI ignored competitor testimony (from Google, Amazon, etc.) about substitutability.

Correct market definition has ramifications for whether Meta can be said to hold dominant position, and whether any alleged conduct causes harm in that specific or broader market.

6. Evidence Cited by CCI & Meta’s Rebuttals

Evidence by CCI

• The CCI’s findings are based on its investigation, which claims that the WhatsApp policy update may force users or businesses to accept certain data sharing, thereby giving Meta an unfair advantage in gathering data for display advertising.
• CCI also considered that user data collected across Meta’s family of apps (Facebook, WhatsApp, Instagram) could be used for improved targeting, ad measurement, etc., which may foreclose or disadvantage rivals.
• The regulator imposed remedies including barring data sharing for advertising among Meta entities (for certain types), require opt-outs or disclosures.

Meta’s Rebuttal / Counter Evidence

• Meta argues that CCI did not survey advertisers or users to establish actual harm or substitution; i.e. no empirical data showing that advertisers shifted budgets away because of policy change.
• Argues that data sharing in question was limited, optional business features; not coercive or mandatory.
• States that the policy did not alter end-to-end encryption or core privacy of personal messages.
• Claims a lack of concrete instances of marketplace foreclosure (e.g. rivals losing business, or being denied access) attributable to the policy.

7. Penalty & Remedies Imposed by CCI

• The CCI imposed a fine of ₹213.14 crore on Meta for what it found to be unfair business practices linked to the WhatsApp 2021 policy update.
• Also directed remedial measures: notably, a five-year ban on WhatsApp sharing data with other Meta companies for advertising purposes.
• Conditions about user consent, opt-outs and disclosures were part of the order.

8. Meta’s Legal Strategy & Arguments Before NCLAT

• Meta is contesting both the penalty and the behavioral remedies, arguing that they are legally flawed.
• Key strategy: highlight lack of empirical evidence, over-reliance on speculation, and incorrect market delineation.
• Meta’s advocates argue that remedies must be proportionate, necessary; CCI did not justify why 5 years is required; this duration is arbitrary in a fast-evolving digital market.
• Meta also argues jurisdictional questions: that issues related to data safety / privacy might not fall strictly under competition law and should be addressed by data protection regime.

9. Potential Implications for Digital Regulation in India

• How this case turns out will be important for the boundary between privacy regulation and competition law in India. Meta’s claim that CCI overstepped could shape how future regulatory actions are framed.
• It affects advertising businesses, especially companies using online display ads. If data sharing is heavily restricted, ad targeting might shift, costs might increase, etc.
• For startups and smaller rivals, the case may matter a lot: if big platforms are allowed to integrate data freely, they have advantage; if not, then regulatory checks might level the playing field.
• For user privacy and data protection norms: even though the case is competition law, privacy concerns (data sharing, consent, clarity) are central, so expectations could increase for regulators to ensure transparency.

10. Criticism, Risks & Counterarguments

• Critics may argue that Meta is underplaying the power imbalance in digital platforms and how data amassed via network effects gives unfair advantage even if overt “denial of market access” is not clearly demonstrated.
• Risks for Meta if the NCLAT upholds CCI’s decision: higher compliance costs, limitations on data monetization, reputational damage.
• For regulators: danger of setting precedents that are either too weak (if CCI loses) or too intrusive (if regulators overreach into privacy territory), leading to chilling effects on innovation.
• Counterarguments in favour of CCI: sometimes indirect effects, anticipatory harms are recognized in competition law; definitions of dominance and abuse need not always wait until harm is fully manifested if evidence shows strong likelihood; public purpose of protecting competition vs just protecting incumbents.

11. Global Comparisons: How Other Jurisdictions Are Handling Similar Issues

• European Union: GDPR + Digital Markets Act, where data sharing across platforms, openness, consent, non-discrimination are regulatory themes.
• US: Antitrust investigations into big tech – e.g., how Amazon, Google, Apple, Meta are being scrutinized over data collection, platform design.
• UK, Australia: digital markets regulation balancing competition and data privacy concerns.
• Key point: courts/regulators elsewhere have sometimes allowed speculative or potential harms if limitation / remedies are proportionate, especially in digital markets. But burden of proof of actual or probable harm is often substantial.

12. What to Watch Next: Timeline & Likely Outcomes

• NCLAT hearings in this matter: Meta and WhatsApp have made submissions; the Tribunal will hear CCI’s responses on scheduled dates.
• Key issues NCLAT likely to decide:
  1. Whether CCI’s market definition is valid;
  2. Whether there is sufficient evidence of actual harm or denial of access;
  3. Whether remedies (especially for 5 years) are justifiable;
  4. Jurisdictional overlap: whether competition law can address data practices / privacy issues.
• Likely scenarios:
  • NCLAT may modify the order (reduce penalty or adjust remedy).
  • It could annul parts of CCI’s findings if evidence is weak.
  • It could emphasize more empirical evidence, require more surveys of advertisers/users.

13. FAQs

Q1. What is Section 4(2)(c) under the Competition Act?
It refers to “denial of market access” as a form of abuse of dominance. It requires that the conduct in question must have occurred or presently be occurring, and it must deny opportunities to competitors to participate in the market.

Q2. Why does market definition matter?
Because to prove dominance or abuse, the regulator must show that the firm is dominant in a well-defined relevant market. If the market is defined too narrowly, dominance may appear artificially large; if too broad, dominance may dilute.

Q3. What are online display vs search advertising?
Online display advertising refers to graphical/banner/visual ads on websites/apps; search advertising refers to text or other ads triggered by search queries. Advertisers often consider both when allocating budgets, based on reach, cost, conversion, etc.

Q4. What does Meta mean by “data is private property”?
Meta’s legal team argues that data collected (with user consent / disclosure) belongs to the platform (Meta in this case), and it can use this data to provide services (like ad targeting). They contend that requiring mandatory data sharing with competitors is unjustified.

Q5. What are behavioural remedies?
Remedies imposed not just through monetary penalty, but through changes in conduct — e.g. banning certain data sharing, requiring opt-outs, disclosures, etc.

14. Conclusion

Meta’s challenge against CCI’s decision is not just about ₹213.14 crore or WhatsApp’s privacy policy. It sits at the intersection of competition law, digital regulation, privacy, and the future of advertising. Meta argues that CCI hasn’t proved that it denied market access to rivals or that consumers or advertisers were harmed; its case, it says, is built more on hypothetical future risks than present evidence.

The outcome of the case will likely set precedent: how digital markets are regulated in India, how privacy and competition overlap, and how heavily regulators can intervene in data sharing and platform behaviour.

For advertisers, competitors, users, and regulators alike, this case will be closely watched — not just for what it says about Meta, but for every large platform operating in India.