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Competition Commission of India on Predatory Pricing and Privacy Policy of WhatsApp Inc.

In a recent judgment by the Competition Commission of India [CCI], by the bench headed by Mr. Devender Kumar Sikri Chairperson in the case of Vinod Kumar Gupta vs. Whatsapp Inc. [decided on June 1, 2017 ], it has been held that even though ‘WhatsApp’ appeared to be dominant in the relevant market, the allegations of predatory pricing had no substance and the WhatsApp had not contravened any of the provisions of Section 4 of the Competition Act.

Vinod Kumar Gupta, the Informant had filed Information under Section 19(1)(a) of the Competition Act, 2002 (the ‘Act’) against WhatsApp Inc., alleging contravention of the provisions of Section 4 of the Act.

It was stated that the WhatsApp was acquired by Facebook Inc. (‘Facebook’), the largest social networking site, on 19th February, 2014 for approximately US$19.3 billion.

As per the Informant, WhatsApp had introduced many changes to its privacy policy on 25th August, 2016 whereby the users of ‘WhatsApp’ were forced to share their account details and other information with ‘Facebook’ in order to continue availing the services of ‘WhatsApp’.

The Informant had made the submission that the “relevant product market” in this scenario would be ‘free messaging App available to smartphones’ and the relevant geographical market was ‘Global’.
As per the Informant, by removing subscription fees, WhatsApp has enlarged its consumer base substantially from 450 million to over 1 billion and it is providing the services by sourcing funds from its parent company i.e. ‘Facebook’.

The Commission also observed the submission of WhatsApp regarding its users safeguards that all types of ‘WhatsApp’ messages (including chats, group chats, images, videos, voice messages and files) and ‘WhatsApp’ calls are protected by end-to-end encryption so that third parties and ‘WhatsApp’ cannot read them and also the message can only be decrypted by the recipient.

Further, as stated by WhatsApp, nothing a user shares on ‘WhatsApp’, including his/ her messages, photos, and account information, is be shared onto ‘Facebook’ or any other apps of ‘Facebook family of companies’ for any third party to see, and nothing a user posts on those apps will be shared by ‘WhatsApp’ for any third party to see.

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