By way of a June 1 2017 order, the Competition Commission of India (CCI) closed the case for alleged abuse of dominance against popular messaging service WhatsApp.(1) The CCI found no prima facie case to investigate the alleged conduct of WhatsApp, despite affirming its dominant position in the relevant market.
The complaint against WhatsApp was filed by Vinod Kumar Gupta on behalf of non-governmental organisation Fight for Transparency Society.
- The use of customers' mobile data – including vital user information (eg, contacts) – for commercial benefits by Facebook violated the Information Technology Act 2000, as well as an unfair condition constituting an abuse of dominance under Section 4 of the Competition Act 2002.
It was also alleged that by offering a free service since January 2016, WhatsApp had indulged in the practice of predatory pricing in violation of Section 4 of the Competition Act.
The CCI concluded on the basis of various reports that WhatsApp held a dominant position in the relevant market for "instant messaging services using consumer communication apps through smartphones in India". It found WhatsApp to be the most popular messaging service on the grounds that it:
- has been installed by 97% of smartphone users in India on 96% of devices;
- has more daily active users than any other communication app in India; and
- has been installed on over twice as many devices as homegrown messaging apps (eg, Hike).
Regarding the allegation that WhatsApp's conduct when making its users sign its new private policy was in violation of the Information Technology Act and the right of privacy, the CCI noted that this issue was already under judicial consideration in an appeal pending before the Supreme Court arising from a writ petition filed with the Delhi High Court (WP(C) 7663/2016) in which similar allegations were raised by WhatsApp users. Therefore, this issue was outside the purview of the CCI as it was not pursuant to the Competition Act.
Finally, regarding the allegation that WhatsApp had indulged in predatory pricing by offering free services, the CCI noted that several other applications (eg, Hike, Messenger and Viber) were available in the relevant market which also offered free services. Therefore, it appeared to be standard practice in the industry and WhatsApp alone could not be accused of indulging in predatory pricing since it was following the revenue model. Further, the CCI noted that no significant costs prevented users from switching from WhatsApp to other communication applications, since all such applications were easily downloadable on smartphones and could coexist on the same device.
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(1) CCI decision dated June 1 2017. For full text, please see the CCI's website.