On September 28, 2022, the DHC dismissed the writ petition raised by Facebook India Online Services Pvt. Ltd. ('Petitioner') challenging the Order dated October 12, 2021, passed by the CCI in the exercise of powers conferred by Section 26 of the Competition Act, and the DHC Order dated August 25, 2022, for its impleadment in the proceedings.1
By way of background, the CCI, on March 24, 2021, initiated an investigation against Whatsapp and Facebook (now known as 'Meta'). The principal issues were questions arising from the updated Privacy Policy and Terms of Service for Whatsapp users as introduced by Whatsapp LLC. It was in this backdrop that the CCI proceeded to frame directions for the DG to commence an investigation.
The CCI Order was challenged by Whatsapp and Meta by way of writ petitions before the DHC, which were dismissed on April 22, 2021. The judgment was thereafter challenged again by Meta and Whatsapp by way of Letters Patent Appeals ('LPA'). Those LPAs were ultimately dismissed by a Division Bench of the DHC in terms of the judgment issued on August 25, 2022. While the present Petitioner did not assail the CCI Order dated October 12, 2021, it moved an application for impleadment in the aforenoted LPAs. The DHC granted the Applicant the liberty to impugn the CCI Order. It is in this backdrop that the instant writ petition came to be preferred.
The DHC in its analysis made reference to the case of Competition Commission of India v. Steel Authority of India Limited2, wherein the DHC observed that the function as discharged by the CCI under Section 26(1) of the Competition Act is essentially administrative in character and in a preparatory measure which merely requires the DG to commence an investigation. The DHC observed that while passing a direction to investigate under Section 26(1), the CCI is merely calling upon the DG to assist it in evaluating whether an infraction of the Competition Act has been made out. The DHC further noted that the Petitioner is undisputedly a subsidiary or sister concern of Facebook Inc. The DHC noted that the impugned Order of the CCI clubbing the information received in respect of its activities with the Suo Motu Case was not only justified but also imperative for the purposes of the investigation. Further, the DHC noted that the Order of the CCI thus not only requires the DG to investigate the affairs of the two principal entities noticed above but also other companies which may fall under the umbrella of control and influence of the latter. That decision presently stands confirmed by the Division Bench of the DHC.
In Cadila Healthcare Limited and Anr. v. Competition Commission of India and Ors.3, the DHC has explained the scope of the expression "subject matter" as occurring in Section 26(1) of the Competition Act to not being restricted merely to the allegations levelled by a complainant but extends to other "allied and unenumerated" aspects and even includes third parties. The investigation of all the above in any case and the opinion of the DHC was clearly implicit in the direction which was issued by the CCI in its Order of March 24, 2021.
The DHC concluded by saying that the instant challenge is misconceived and clearly lacks merit. Accordingly, the DHC dismissed the writ petition along with the pending applications.
Footnotes
1. W.P.(C) 14059/2022, CM APPLs. 42941/2022, 42942/2022.
2. Competition Commission of India v. Steel Authority of India Limited, (2010) 10 SCC 744.
3. Cadila Healthcare Limited and Anr. v. Competition Commission of India and Ors., 2018 SCC OnLine Del 11229.
Originally published 13 January, 2023
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