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Blow for WhatsApp as CCI puts lens on privacy update

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NEW DELHI: The troubles for WhatsApp over its new privacy update are growing in India with fair play watchdog, Competition Commission of India (CCI) ordering an investigation into the matter after finding the proposed changes prima facie “exploitative and exclusionary” for users.
CCI, which took up the matter on a suo motu basis, said the investigation will be carried out by its Director-General, as it sought a final report in the next 60 days.
CCI’s harsh stance comes close on the heels of the objections raised by the IT ministry on the proposed privacy update that, among other things, seeks to share business communication of WhatsApp users with parent Facebook.
CCI expressed displeasure on the development, especially the fact that users have not been given an ‘opt-out’ option from the update as was given earlier. It said that WhatsApp may be taking the benefit of its dominant position in the instant messaging business to initiate such a move where users need to accept the update by May 15.
“Given the pronounced network effects it enjoys, and the absence of any credible competitor in the instant messaging market in India, WhatsApp appears to be in a position to compromise quality in terms of protection of individualised data and can deem it unnecessary to even retain the user-friendly alternatives such as ‘opt-out’ choices, without the fear of erosion of its user base,” CCI said.
“On a careful and thoughtful consideration of the matter, the conduct of WhatsApp in sharing of users’ personalised data with other Facebook companies, in a manner that is neither fully transparent nor based on voluntary and specific user consent, appears prima facie unfair to users. The purpose of such sharing appears to be beyond users’ reasonable and legitimate expectations regarding quality, security and other relevant aspects of the service for which they register on WhatsApp.
In a statement, a spokesperson for WhatsApp said, “We look forward to engaging with the CCI. WhatsApp remains committed to protecting people’s personal communications with end-to-end encryption and providing transparency about how these new optional business features work.”
CCI, however, felt that sharing of business communication data with Facebook may itself raise competition concerns. “Such data concentration may itself raise competition concerns where it is perceived as a competitive advantage. The impugned conduct of data-sharing by WhatsApp with Facebook apparently amounts to degradation of non-price parameters of competition viz. quality which result in objective detriment to consumers, without any acceptable justification.”