INTRODUCTION
INDUSLAW presents the third edition of its quarterly competition law newsletter, 'The Sentinel'. As the name suggests, by way of this short yet extensive compilation of updates, we keep a watch for significant decisions passed by the Competition Commission of India ("CCI"), the National Company Law Appellate Tribunal ("NCLAT"), various High Courts, as well as regulatory and institutional updates which will help you navigate the Indian competition law space with ease.
Separately, for our friends who appreciate the crisp and the sweet, a ready reckoner of the noteworthy developments is set out in the flowchart below.
SUMMARY OF KEY DEVELOPMENTS IN Q3 OF FY 2024-2025
OVERVIEW OF ENFORCEMENT CASES
Decisions by the CCI:
In the third quarter ("Q3") of the financial year ("FY") 2024-25, the CCI issued a total of 11 (eleven) orders in relation to enforcement matters. Of these the CCI:
- passed 2 (two) separate orders finding contravention (including imposition of penalty on Meta platforms Inc.);
- directed the Director General, CCI ("DG") to investigate 2 (two) information;
- declined to investigate 6 (six) information relating to allegations of abuse of dominance and anticompetitive agreements; and
- disagreed with the DG's findings of contravention and closed an information.
A summary of the noteworthy cases is set out below:
CCI imposes a penalty of INR 213.14 crore on Meta in relation to its privacy policy:1
On November 18, 2024, the CCI found Meta platforms Inc. (erstwhile Facebook Inc.) ("Meta") to be guilty of abusing their dominant position and imposed a penalty of INR 213.14 crore alongside directing certain behavioral remedies.
The information2 alleged that: (i) WhatsApp's 2021 Privacy Policy ("2021 Policy") made it mandatory for users to accept the new terms of service before February 8, 2021, in order to retain their WhatsApp account access and information; and (ii) users had to mandatorily agree to the collection and sharing of their data with Meta. Accordingly, the CCI passed a prima facie order and directed the DG to investigate the conduct of Meta.
The DG delineated two relevant markets, i.e., the market for: (i) Over the Top ("OTT") messaging apps through smartphones in India ("OTT Market"); and (ii) online display advertising in India ("Display Advertising Market"). Further, he found Meta to be dominant in these markets owing to a larger active user base than any competitor, user dependence on WhatsApp, and wide access to resources. The DG found that Meta abused its dominant position by: (i) imposing unfair conditions through its 2021 policy; (ii) denying market access to its competitors; and (iii) leveraging its dominance in OTT Market to enter into the Display Advertising Market.
Meta challenged the jurisdiction of the CCI and alleged that the DG's findings are in relation to data protection and privacy laws which are outside the purview of the Competition Act, 2002 ("Act"). However, the CCI noted that such data-sharing arrangements without user choice is fundamentally unfair as it degrades the quality of service by diminishing privacy standards, which are an essential non-price parameter of competition.
The CCI upheld the findings of the DG and observed that Meta (through WhatsApp) has:
- imposed unfair conditions on its users, as its 2021 Policy update was in the nature of "take-it-or-leave-it". As such, it compelled its users to accept the data collection terms and data sharing without any option or alternative to the users; and
- leveraged its dominant position in the OTT Market through the 2021 Policy to strengthen its position in the Display Advertising Market. The data sharing enabled by the 2021 Policy update allowed Meta to gain a wider reach and understanding of user behaviour, which further entrenched its dominant position in both the relevant markets, creating a near-monopolistic position for Meta, thereby impeding competition and denying market access for its competitors.
Therefore, the CCI imposed a penalty of INR 213.14 Crore on Meta, and ordered Meta to: (i) refrain from data sharing for advertisement purposes for a period of 5 (five) years from the date of the CCI order; (ii) allow users to opt-out of such terms of service without any denial of access; (iii) stop sharing data collected on WhatsApp for purposes unrelated to WhatsApp in order to allow access to the app in India; and (iv) provide a detailed explanation of any data sharing activities to users.
View: In a first, the CCI has recognised data privacy as a form of non-price competition. Meta has faced penalties owing to similar regulatory concerns for its 2021 Policy in various other countries around the globe. Thus, this order demonstrates the CCI's growing prowess in tackling nuanced issues arising from data policies of global big-tech companies.
CCI issued a cease-and-desist order against table tennis associations for engaging in refusal to deal and denying access to players and clubs:3
On December 12, 2024, the CCI found Table Tennis Federation of India ("TTFI") and other Table Tennis Associations ("TTAs"),4 to be guilty of abusing their dominant position and refusing to deal and directed them to cease and desist from such conduct.
The information alleged that the TTAs restricted various table tennis ("TT ") players from associating and participating in unaffiliated tournaments (such as the one organised by TT Friendly Super League Association by certain acts such as: (i) Suburban Table Tennis Association's ("STTA") issuance of notice; and (ii) TTFI's inclusion of certain clauses in Memorandum of Association ("MoA"). The CCI observed that STTA and TTFI's conduct prima facie appeared to result in a denial of access to utilise the services of TT players and passed an order directing the DG to investigate the conduct of the TTAs. The CCI also passed an interim order restraining STTA from issuing any communication to players/parents/ coaches/ clubs, restricting or dissuading them from joining or participating in tournaments organized by associations/ federations not recognized by it.
The DG observed that: (i) the TTAs were dominant in the market for organisation of TT leagues/events/ tournaments in India and the market for provision of services by players for table tennis leagues/events/ tournaments in India, owing to their regulatory powers and thereby exclusive control over their respective regions; (ii) STTA abused this dominant position by creating entry barriers, foreclosing competition and restricting opportunities for organisation of TT tournaments unless authorized and TT players ability to participate in them; and (iii) the restrictive provisions of the TTAs5 MoA/constitutions/bye-laws were anti-competitive as they limited the players professional growth and exposure.
The CCI rejected the preliminary objection of the TTAs and reiterated its decisional practice that sports federations are considered as 'enterprise' when they are engaged in economic activities. On merits, the CCI upheld the findings of the DG in relation to market delineation, dominance of TTAs and abuse of such dominance and denial of market access. However, the CCI disagreed with the DG regarding its finding that certain constitutional rules of the TSTTA and the Maharashtra State Table Tennis Association ("MSTTA") also amount to abuse of dominant position. It was observed that such rules were merely regulatory measures to ensure professional standards. Notably, the CCI did not impose any penalties, having taken note of the corrective measures undertaken by the TTAs including the withdrawal of the notice and the amendment/removal of the restrictive clauses therein and mandated the TTAs to cease and desist.
View: The CCI has ruled any practices unduly restricting player participation in events organised by unrecognised associations or federations to be anti-competitive. While CCI acknowledges the role of these federations as regulators of various sports, it has held that such restrictions would be considered as a denial of market access when they are imposed for reasons other than the protection of interest of the sport.
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Footnotes
1. Suo Moto Case No. 1 of 2021, In Re: Updated Terms of Service and Privacy Policy for WhatsApp users, order dated November 18, 2024, available at: https://www.cci.gov.in/antitrust/orders/details/1158/0; Case No. 5 of 2021, Prachi Kohli and WhatsApp LLC, order dated November 18, 2024, available at: https://www.cci.gov.in/antitrust/orders/details/1157/0; and Case No. 30 of 2021, Internet Freedom Foundation & WhatsApp LLC, Meta Platforms Inc., order dated November 18, 2024, available at: https://www.cci.gov.in/antitrust/orders/details/1156/0.
2. The CCI had taken suo moto cognizance of WhatsApp's 2021 privacy policy which mandated acceptance of its new terms and conditions, failing which users would lose access to their account. Subsequently, the CCI also clubbed two separate information filed by Ms. Prachi Kohli and the Internet Freedom Foundation, against WhatsApp, Meta, and Facebook India Online Services Limited, making similar allegation.
3. Case No. 19 of 2021, TT Friendly Super League Association And The Suburban Table Tennis Association & Ors., order dated December 13, 2024, available at: https://www.cci.gov.in/antitrust/orders/details/1163/0.
4. The other TTAs were: (i) Suburban Table Tennis Association; (ii) Maharashtra State Table Tennis Association; (iii) TTFI; and (iv) the Gujarat State Table Tennis Association ("GSTTA"). The information was filed by TT Friendly Super League Association that promotes Table Tennis in India and organises and conducts friendly TT matches for its members around Mumbai City, Mumbai Suburban and Thane District in Maharashtra.
5. Namely, GSTTA and TTFI.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
