CCI’S TAKE ON TECH GIANT: WHATSAPP’S ABUSE OF DOMINANCE
-Viviane Reding, (Former Vice-President, the European Commission)
A dominant entity in the market holds the power to exploit the consumers and the competition in whichever way it wants because the dependence of the consumers on the services of such an entity is so high that even if its practices are detrimental for the consumers, they will not discontinue using it. Therefore, the Competition Law exists to keep a check on such practices. In the Competition Act, Section 4 defines Dominance as the ability of any enterprise to behave independently of its competitive forces and affect the competition in its favour. The competition Law does not prohibit dominance per se but proscribes the abuse of such dominance which hampers the free and fair competition in the market.
Does WhatsApp’s Recent Change in Privacy Terms Amount to ‘Abuse of Dominance’?
In addition to all of this, if the users fail to agree to the policy before 15th May, then they won’t be able to continue using it. This just shows how WhatsApp has used its dominance in the most arbitrary manner.
WhatsApp’s Abuse of Dominance: Through the Prism of Law
1. Firstly, there is no legitimate reason as to why the information has to be shared with other platforms. Such sharing not only questions the security of the user’s data but raises concerns related to abuse of dominance under Section 4(2)(a)(i) of the Act. The fact that agreeing to the policy is the only option with the users, it is prudent to assert that WhatsApp is imposing unfair conditions on its users.
2. They also observed that the terms of the policy are neither completely transparent nor based on voluntary consent of the users. It gives no real choice to the users, which is unfair to them. Also, the nature and scope of the policy is quite broad and ambiguous in nature. Being the owners of their personal information, the users are entitled to know the scope of such policy in a univocal and lucid manner. Further, the use of words like ‘such as’, ‘For example’, ‘includes’, ‘etc.’ makes the list non exhaustive.
4. It must also be taken into consideration that on WhatsApp, communication between two people can only happen if both the users have registered on it. As a result, more and more people join it in order to facilitate the conversation. Now, if any person, who doesn’t agree with the new policy, wishes to switch the platform, they would have to convince all his other contacts to switch simultaneously. This is what is called a lock- in effect. This term means a practice in which companies make it exceptionally difficult for its users to leave its services, even if they want to but they are trapped in such a way that it becomes impossible.
5. Lastly, if at all people switch from WhatsApp to another platform, they may lose all their historical data on it, as the process to port the data is quite cumbersome and time consuming. This would increase the switching cost.
Being mindful of all these observations, the CCI has come to a conclusion that such handlings will raise concerns related to fair trade practices with reference to competition law and hence it has ordered the director general to delve into the matter and conduct an investigation under section 26(1) of the Act and submit the report within 60 days to the commission.
In response to this, WhatsApp and Facebook have recently filed a plea in Delhi High Court to put a stay on the order. The counsel for the tech giants argued that firstly, it is not CCI’s place to order anything as it is a matter related to privacy and hence of constitutional law and not competition law. Secondly, since, the Supreme Court is already handling the same case, the CCI need not conduct an investigation. Be that as it may, the Delhi High Court has reserved its judgement and is yet to give its verdict. However, we are of the opinion that this issue falls in the domain of competition law, which is why CCI is the right authority to keep a check on it.
Other Legislations for Data Protection
Today’s consumers value non- price parameters such as quality, innovation, and customer service, equally to the price of the service. Privacy of data, is one such parameter, which the user’s value highly now, more than ever. Reduction in protection of consumer data and loss of control over personal data by the users can lead to reduction in quality of service. Moreover, Lower data protection by a dominant entity can lead to not only exploitation of consumers but also have cliquish effects as they would further reinforce their position and leverage themselves in competition. Cross- linking of data and incorporation can further strengthen the dominant position. Data collected from WhatsApp will help other Facebook owned platforms to track down users and consumer behaviour. Apart from this, the Information Technology Act (ITA) 2000 protects users' privacy to a great extent but they are not yet recognized by the European Union as many gaps still exist. These lacunas leave a number of bodies unregulated and various types of information unprotected.
This article has been written by Hritika Jain and Rishika Jain. Hritika is a 2nd year BBA LLB student at Chanakya National Law University, Patna and Rishika Jain is a 2nd year BA LLB student at National Law Institute University, Bhopal.