DELHI HIGH COURT REFUSES TO STAY CCI PROBE INTO WHATSAPP PRIVACY

Background

On 19 January 2021, the Competition Commission of India(herein after CCI) took suo moto cognizance of the updated privacy policy of Whatsapp, wherein it made it mandatory for users to accept the terms and conditions in order to retain their Whatsapp account and also that it would share all information with its parent company Facebook.WhatsApp argued before the Commission that the CCI had previously, in Vinod Kumar Gupta case, assessed the Terms of Service and Privacy Policy as updated in 2016, and regarded the allegations raised against data sharing related to the Information Technology Act (IT Act) and data protection/ privacy laws and held that allegations of breach of the Information Technology Act do not fall within its purview. The Commission rejected this claim stating that “in digital markets unreasonable data collection and sharing thereof may grant competitive advantage to the dominant players and may result in exploitative as well as exclusionary effects, which is a subject matter of examination under competition law.”Accordingly the Commission directed the Director General to investigate the actions of the Company under Section 26(1) of the Act, on 4th June 2021 for violations under Competition Act, more specifically Section 4 of the Act and Regulations 11 and 35 of the Competition Commission of India (General) Regulations, 2009.Consequently, Whatsapp moved to the Delhi High Court against this order. The Court consisting of a single judge rejected the claim of Whatsapp and refused to stay the orders of the Commission.

Current Situation

Whatsapp moved to the Division bench of Delhi High Court against the order of the DG, CCI and the impugned order of the single judge of the same Court, asking for an ex parte ad interim stay of operations.Mr. Harish Salve representing the Appellant Whatsapp submits that while the present LPA is pending before a Division Bench of this court, the DG has issued notice dated 04.06.2021 under section 41(2) read with section 36(2) of Competition Act 2002 demanding from the appellant information and response to certain queries which are already subject matter of the challenge in the LPA, in under 15 days since the investigation is “time bound”. Mr. Harish Salve stated this as an “act that smacks of overreach”Additional Solicitor General Aman Lekhi representing the CCI argued before the court that the notice issued by the DG on June 4 is a continuation of the CCI order passed on March 24. Lekhi also told the vacation bench that the preparation of the report would not be completed at least before the next date of hearing before the Roster Division Bench, which is July 9.The Court refused to stay the orders of the Commission. The Bench consisting of Anup Jairam Bhambhani and Jasmeet Singh stated that “there is no doubt that the issuance of impugned notice dated 04.06.2021 by the DG is a step in furtherance of the investigation commenced in Suo-Motu case”. Moreover no interim relief was given by the Division bench on 6th May, 2021 even though same relief was sought.Thus, the Court refused to stay the order as of now and directed the matter to be listed before the Roster Division Bench on 9th July 2021.

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