CCI’s Action Against Meta Exposes India’s Digital Challenges

Source: The post CCI’s Action Against Meta Exposes India’s Digital Challenges has been created, based on the article “The challenge of policing digital giants” published in “The Hindu” on 21 March 2025. CCI’s Action Against Meta Exposes India’s Digital Challenges.

UPSC Syllabus Topic: GS Paper 2– Governance-Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Context: On November 18, 2024, the Competition Commission of India (CCI) fined Meta ₹213.14 crore and banned WhatsApp from sharing user data for five years. This action followed concerns over WhatsApp’s 2021 privacy policy, which allegedly abused Meta’s dominant market position in India’s digital ecosystem.

For detailed information on Committee Report on Digital Competition Law read this article here

The importance of data in the 21st century

1. Foundational Role in Dominance: Data drives market power in digital economies by refining algorithms and enabling targeted advertising.
2. Unlimited Utility: Unlike traditional resources, data can be continuously reused and analyzed, enhancing product offerings and consumer engagement.
3. Data-driven Network Effects: More users generate more data, which in turn increases a platform’s value, as seen with Meta’s use of WhatsApp data.
4. Barrier to Competition: Large data sets create high entry barriers for new competitors, consolidating market dominance for companies like Google and Meta.

Reason for penalising meta in 2024 by CCI

1. Privacy Policy Abuse: Meta’s subsidiary, WhatsApp, introduced a privacy policy in 2021 that forced users to share data with Meta platforms like Facebook and Instagram, under a “take-it-or-leave-it” condition.
2. Dominant Market Position: The policy exploited WhatsApp’s dominant position in the Over-The-Top (OTT) messaging and online advertising markets.
3. Harming Competition: This mandatory data-sharing allowed Meta to strengthen its market power unfairly, thus limiting competition from other messaging platforms.
4. Fine and Initial Ban: Meta was fined ₹213.14 crore and initially banned from data sharing for five years, demonstrating the CCI’s stance against unfair market practices.
5. NCLAT’s Intervention: In January 2025, the National Company Law Appellate Tribunal (NCLAT) stayed the penalty and the ban, requiring Meta to deposit 50% of the fine.

Global Regulatory Actions

1. U.S. Actions: The U.S. Subcommittee on Antitrust highlighted the need to reform antitrust laws against tech giants. Meta faces antitrust litigation over its acquisitions of Instagram and WhatsApp.

2. EU Regulations: The Bundeskartellamt found Meta guilty of abusing its dominant position by merging user data without consent, violating EU competition law and GDPR.
3. Australian Measures: Australia is taking steps to regulate digital platforms to curb their market dominance.
4. Google in Europe: Google was fined over €8 billion in the EU for anti-competitive practices in mobile operating systems and app markets.
5. Indian Enforcement: Google was fined ₹1,337.76 crore by India’s Competition Commission for mandating the pre-installation of its apps on Android devices

Limitations in India’s Legal Framework

1. Lack of Specific Provisions: The Competition Act, 2002, does not address data monopolies directly.

2. Data-Driven Dominance: Traditional competition law, focusing on price-based dominance, fails to regulate markets where data is the primary source of power.
3. Coordination Gaps: The Digital Personal Data Protection Act, 2023, although addressing consent and data use, lacks explicit coordination mechanisms with the CCI, limiting effective regulation.
4. Outdated Definitions: Terms such as “market power” and “dominant position” need updates to better represent digital economy dynamics.
5. Need for Modern Regulations: Current laws do not include necessary provisions for interoperability and the separation of integrated services, which are essential to prevent monopolistic behaviors.

Way Forward

1. India can learn from the EU’s Digital Markets Act (DMA) and GDPR, which work together to handle both competition and data concerns.
2. The Economic Survey 2024-25 highlights the role of AI and digital transformation, making regulatory reform more urgent.
3. India needs forward-looking laws to manage the growing power of tech giants and ensure fair digital growth.

Question for practice:

Evaluate the effectiveness of India’s current legal framework in managing data-driven market power, as illustrated by the CCI’s 2024 action against Meta.