NEW DELHI, Jan 15 (Reuters) - Meta may need to "roll back or pause" certain features in India because of an antitrust mandate that prohibited its WhatsApp messaging service from sharing user data with Meta for advertising purposes, as disclosed in a court submission by the U.S. company reviewed by Reuters.
Meta is attempting to challenge a ruling from the Competition Commission of India (CCI) in November, which accused the company of abusing its dominant position and "coercing" WhatsApp users into accepting a 2021 privacy policy that allegedly extended user data collection and sharing, thus giving it an unfair advantage over competitors.
The CCI has imposed a penalty of $24.5 million and a five-year ban on the data-sharing practice in India, Meta's largest market with more than 350 million Facebook users and over 500 million WhatsApp users.
Although Meta has publicly voiced its disagreement with the CCI's decision, its legal filing is critical of the watchdog's actions and reveals the company's unease about the ruling.
The company is worried that the ban on data-sharing between WhatsApp and Meta will hinder its ability to deliver personalized advertisements to users on Facebook and Instagram. Meta's filing with the Indian appeals tribunal on Jan. 3, spanning nearly 2,000 pages, which is not public, highlights these concerns.
Explaining the implications of the ruling for the first time, Meta stated in its filing that the data-sharing ban could prevent an Indian fashion retailer from customizing ads on Facebook or Instagram based on their interaction with a WhatsApp user regarding a specific clothing line.
"In its broadest interpretation, implementing the remedy will likely necessitate Meta to roll back or pause numerous features and products," the filing said.
"It impacts Meta’s and WhatsApp’s ability to remain commercially viable," the company added, without specifying the exact business impact in monetary terms.
The revenue of Facebook's registered entity for selling advertising inventory in India - Facebook India Online Services - reached $351 million in 2023-24, the highest in at least five years.
Meta's plea will be heard by the Indian appeals tribunal on Thursday. Meanwhile, the tribunal has the authority to temporarily suspend the CCI directive.
Meta and the CCI declined to respond to Reuters' inquiries.
The antitrust concerns in India contribute to Meta's ongoing global challenges. In 2021, WhatsApp faced allegations of violating the EU's regulations by not presenting policy changes clearly. Subsequently, it agreed to clarify the modifications to EU users.
The Indian dispute began in 2021 following backlash against WhatsApp's privacy policy alterations. Meta informed the CCI that the changes were solely aimed at explaining optional business messaging features and did not expand data collection or sharing capabilities.
However, the CCI's ruling in November stated that WhatsApp's policy compelled users to accept or risk losing service access without an opt-out choice. The CCI instructed WhatsApp to allow users to decide whether they want their data shared with Meta or not.
In its challenge at the Indian tribunal, Meta criticized the CCI and its processes, arguing that the watchdog should have engaged with Meta and WhatsApp before issuing directives to alter company behavior.
"Meta stated that 'The Commission does not have the necessary technical expertise and knowledge to understand the ramifications of the remedies,'" as mentioned in the court filing.