Case Title: Facebook India Online Services Private Limited v. CCI
The Delhi High Court rejected the appeal by Facebook India Online Services Private Limited contesting the Competition Commission of India's (CCI) inquiry into WhatsApp's privacy policy for 2021, which the national regulator had launched against the company. The subsidiary of Facebook Inc. or Meta, the global technology firm, is Facebook India Online Services Private Limited. Justice Yashwant Varma rejected the argument, saying that the "luxury to ligate" must come to a stop. The subsidiary was "clubbed" in the inquiry based on the Director General of CCI's decision to send a notice identifying it as an opposing party after learning of its significance from the Internet Freedom Foundation. For Facebook India Online, senior attorney Parag Tripathi argued that the subsidiary was wrongfully included in the inquiry despite the absence of any supporting evidence."I have been clubbed together without any prima facie examination and application of mind," said Tripathi.He added "There has to be an opinion. I am not saying it has to be a detailed order. But there has to be a prima facie opinion that there exists a prima facie case……In the clubbing also, there has to be a prima facie case against me."Tripathi added that there was no accusation made against Facebook Online India in the primary order issued against WhatsApp and its parent firm, Facebook Inc. Thus, he argued that the Director General cannot be ordered to conduct an inquiry prior to the CCI issuing a prima facie conclusion under Section 26(1) of the Competition Act, 2002.Tripathi made reference to a recent decision in which a division bench of the court upheld the CCI's investigation into Facebook and Whatsapp's appeals. Specifically, it was regarding the Court's judgement to dismiss Facebook India Online's impleadment application while granting it liberty to challenge the CCI Order.
In this backdrop, Tripathi said "The clubbing order can't be in a better position than the original order. When you're clubbing, it's not enough to say that there are some allegations against parties there, you have to show that there is an opinion of prima facie involvement."
Justice Varma's first question to Tripathi was if Facebook Online India, as an Indian subsidiary, operated under a different organisational structure from its parent business in terms of its programming and content.Tripathi responded by saying, "On the present platform, I have no role. I neither run it nor control it nor operate it. The subsidiary has no link to Facebook Inc." Justice Varma replied to this orally: "With all due respect, you suddenly wake up now and challenge the order. Enough is enough. There has to be some end to luxury to litigate." On the other side, the attorney for CCI said that the division bench order adequately addressed and addressed the concerns expressed by Facebook India Online. The Court rejected the plea after hearing from the parties.
Facebook and Whatsapp's appeals against a single judge's decision were rejected by the division bench of the High Court, which noted that the 2021 Policy effectively forces its users to accept it by giving them the illusion of choice before sharing their sensitive data with the Facebook Companies specified in the policy.
Noting that WhatsApp holds a dominant position in the relevant product market, the Court noted that there is a significant "lock-in effect" that prevents users from switching to another platform "despite dissatisfaction with the product," as demonstrated by the fact that WhatsApp's user base remained constant when the 2021 Policy was announced despite an increase in the downloads of rival applications like Telegram and Signal.