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CCI’s Landmark Order Against Meta
Context:
On November 18, 2024, the Competition Commission of India (CCI) issued a groundbreaking order against Meta, imposing a fine of ₹213.14 crore and enforcing several behavioural restrictions.
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- One of the most significant directives included a five-year ban on Meta’s ability to share user data collected on WhatsApp with its other platforms, such as Facebook and Instagram, for advertising purposes.
- However, Meta swiftly challenged the ruling in the National Company Law Appellate Tribunal (NCLAT), which, on January 23, 2025, granted a stay on both the penalty and the data-sharing ban, subject to Meta depositing 50% of the total fine.
Abuse of Dominance and the Role of Data in Digital Markets
- Abuse of Dominant Position: The CCI’s decision stemmed from its findings that WhatsApp’s 2021 privacy policy update constituted an abuse of Meta’s dominant position in India’s Over-The-Top (OTT) messaging services and online display advertising markets.
- The update mandated that users consent to expanded data-sharing on a “take-it-or-leave-it” basis, allowing Meta to integrate user data across its platforms.
- This move gave Meta a significant competitive advantage in digital advertising while restricting competition in the messaging services market.
- Data as New Oil: In today’s digital economy, data has become the new oil, yet its value far exceeds that of traditional resources due to its limitless usability.
- Companies like Meta leverage massive data reserves to refine algorithms, deliver hyper-targeted advertising, and enhance user experiences—effectively locking consumers into their ecosystems.
- These data-driven network effects further reinforce their dominance, making it increasingly difficult for competitors to challenge their market position.
- Google Scrutiny: Meta is not the first tech giant to face scrutiny from Indian regulators.
- In 2022, the CCI imposed a ₹1,337.76 crore fine on Google for abusing its dominance across various markets, including Android operating systems, app stores, web browsers, and online search services.
- Google’s practice of mandating the pre-installation of its apps on Android devices was deemed anti-competitive. This ruling was upheld by the NCLAT in 2023.
Global Crackdown on Tech Monopolies
- Concerns: Regulatory concerns over Meta’s dominance extend beyond India, as governments worldwide grapple with the unprecedented market power of tech giants.
- The U.S. Subcommittee on Antitrust, Commercial and Administrative Law has emphasised the need for antitrust reforms, particularly regarding Meta’s acquisitions of Instagram and WhatsApp, which have been accused of eliminating competition.
- Google and USA: Similarly, Google has faced multiple lawsuits in the U.S., with a 2024 ruling by the U.S. District Court for the District of Columbia finding the company guilty of violating the Sherman Act by entering exclusive agreements in search and advertising markets.
- Others: Other nations are also taking action.
- In Germany, the Bundeskartellamt (Federal Cartel Office) ruled that Meta violated EU competition laws and the General Data Protection Regulation (GDPR) by aggregating user data without explicit consent.
- In the European Union, regulators are scrutinising Meta’s ad-supported subscription model, while Google has already faced €8 billion in antitrust fines for its anti-competitive behaviour in mobile operating systems and digital advertising.
- Global Efforts: The cases against Meta and Google reflect broader global efforts to curb data exploitation, vertical integration, and monopolistic practices.
- Historical precedents, such as the AT&T breakup in the U.S. and antitrust actions against Microsoft, serve as reminders that unchecked monopolies in tech industries can stifle innovation and competition.
Need for Stronger Competition Laws in India
- India’s Competition Act, 2002, lacks explicit provisions to regulate data-centric monopolies.
- While traditional competition law focuses on price-based dominance, modern digital markets see companies establishing dominance through data aggregation. To address this gap, India must consider amendments that:
- Introduce “data monopolisation” as a criterion for assessing market dominance.
- Redefine “market power” to reflect data-driven competitive advantages.
- Mandate interoperability and data-sharing agreements to level the playing field.
- Ensure structural separation of integrated services where necessary.
- A well-structured framework could prevent entrenched monopolies while fostering innovation and fair competition.
Integrating Competition Law with Data Protection Regulations
- The Digital Personal Data Protection Act, 2023, is a step toward regulating data collection, consent, and usage.
- However, its effectiveness is limited by the lack of coordination between the CCI and the Data Protection Board of India.
- India could take cues from the European Union’s Digital Markets Act (DMA) and GDPR, which offer a comprehensive approach to tackling data exploitation and anti-competitive practices.
Future of India’s Digital Regulation
- India’s rapid digital transformation, as highlighted in the Economic Survey 2024-25, underscores the growing importance of artificial intelligence (AI), digital markets, and data governance.
- As technology evolves, so must regulatory frameworks.
- Policymakers must proactively address emerging challenges and ensure that competition laws keep pace with advancements in digital ecosystems.
The Meta case serves as a pivotal moment in India’s efforts to regulate digital monopolies and safeguard consumer interests. However, for lasting impact, India must modernise its competition laws, enforce stronger regulatory coordination, and establish clear legal frameworks to manage the complexities of data-driven economies.
