By taking cognisance of the potential impact of the policy on Indian consumers, the CCI has rightfully stood up on behalf of the free market as well as privacy rights of the consumers, terming it in its well-reasoned and detailed prima facie order as ‘exclusionary’ and ‘exploitative’ (bit.ly/39rWTvl). While the policy had been under judicial scrutiny, the CCI investigation will bring in its focussed expertise to the rescue of WhatsApp’s 53 crore Indian consumers. This is particularly welcome as India is still awaiting finalisation of its Personal Data Protection law, with the joint parliamentary committee still seized of the matter.
Privacy degradation, when a company collects data for one purpose and then forces consumers to consent to that data being used for other purposes, can be deeply detrimental to consumers and their privacy. A low standard of data protection, when combined with the act of cross-linking of data across services being offered by group companies, can create a vicious cycle wherein a dominant player collects humongous personal data and limits free choice. Once the consumer has no ability to move out or has simply given away too much data, he becomes vulnerable to exploitation. Even more dangerously, social media platforms can manipulate the consumer and influence their behaviour in a surreptitious manner.
From a free market point of view, this can also set into motion an irreversible process of non-price competition, wherein, large technology companies with big data can elbow out smaller startups or simply buy them out in killer acquisitions. The entry barrier for new technology companies that don’t have existing reservoirs of consumer data can become so high, that even the brightest among our innovators will have to just give up.
If one looks around, the market regulator in Japan had in 2019 come up with guidelines that any use of personal information, including users’ purchase history and location, without their consent would constitute an “abuse of a superior bargaining position”, a violation specified under Japan’s Antimonopoly Act. In Germany too, Facebook had been held guilty by the German Federal Court for abusing its dominant position in forcing users to share their data with other Facebook-owned entities – WhatsApp and Instagram. In the US too, FTC is scrutinising these practices.
While a fuller picture here will emerge on completion of the investigation by DG (Investigation), what WhatsApp has done in India comes across on various accounts as a flagrant abuse of its dominant position.
WhatsApp has played a key role in connecting people and helping small businesses. It has to be remembered that there are mature world-class regulators acting as umpires to show red and yellow flags on the playfield.
Views expressed above are the author’s own.
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