Editorial 1: The challenge of policing digital giants

Context

The Meta case underscores the importance of adopting a more proactive and future-oriented approach to competition law.

Introduction

On November 18, 2024, the Competition Commission of India (CCI) issued a significant ruling, imposing a ₹213.14 crore fine on Meta and enforcing several behavioral restrictions. One key measure was a five-year ban on sharing WhatsApp user data with other Meta platforms like Facebook and Instagram for advertising purposes. In response, Meta appealed the decision to the National Company Law Appellate Tribunal (NCLAT). On January 23, 2025, the NCLAT granted a stay on both the data-sharing ban and the penalty, provided that Meta deposits 50% of the total fine.

CCI’s Ruling on WhatsApp’s 2021 Privacy Policy Update

• The Competition Commission of India (CCI) found that WhatsApp’s 2021 privacy policy update violated competition laws.
• It abused its dominant position in India’s OTT messaging services and online display advertising markets.
• The update forced users to consent to expanded data-sharing across all Meta platforms.
• Users had to accept the policy on a "take-it-or-leave-it" basis, giving them no choice.
• Meta’s access to extensive user data gave it a competitive advantage in digital advertising.
• The policy was seen as a move to strengthen WhatsApp’s market power, harming competition.
• It restricted other messaging platforms from competing on a level playing field.

The era of data

Global actions

• Widespread Concerns: Meta’s market dominance is a global issue, with regulators worldwide addressing its competitive practices.
• U.S. Antitrust Scrutiny: The Majority Staff Report on ‘Competition in Digital Markets’ (U.S. Subcommittee on Antitrust) called for urgent reforms in antitrust laws to curb the market power of tech giants.
  • Meta faces antitrust lawsuits in the U.S. over its acquisitions of Instagram and WhatsApp, accused of creating barriers for competitors.
  • Google was found guilty of monopolistic practices in 2024 by the U.S. District Court for the District of Columbia for exclusive agreements in search and advertising markets.
• Regulatory Actions in Other Countries: Australia has implemented measures to check the dominance of digital platforms.
  • Europe’s Facebook-Germany Case: The Bundeskartellamt (Federal Cartel Office) ruled that Meta violated EU competition laws and GDPR by combining user data from different sources without consent, harming both privacy and competition.
  • The EU is investigating Meta’s ad-supported subscription model, while Google has been fined over €8 billion for anti-competitive practices in mobile OS and app markets.
• Parallels with Past Antitrust Cases: The AT&T antitrust ruling led to the breakup of its monopoly by forcing the divestiture of 22 operating companies.
  • Microsoft’s antitrust case resulted in regulatory oversight, ensuring API access for third-party developersand more flexibility for PC manufacturers.
• The Bigger Picture: CCI’s orders against Google and Meta are part of broader efforts to regulate the overwhelming dominance of tech giants in advertising, e-commerce, and smartphone services.
  • While these rulings mark progress, ongoing disputes across jurisdictions suggest they may be temporary measures rather than long-term solutions for regulating digital monopolies.

On India’s laws

• Current Gaps in the Competition Act, 2002: The Competition Act, 2002 lacks specific provisions to regulate data-driven monopolies.
  • Traditional laws focus on price-based dominance, whereas digital markets see dominance through data aggregation.
• Proposed Amendments to Address Data Monopolization: Introduce "data monopolization" as a key factor in assessing market dominance.
  • Redefine "market power" and "dominant position" to reflect data-driven competition.
  • Implement global best practices, such as:
    • Mandating interoperability and data-sharing agreements.
    • Separating integrated services to prevent monopolistic control.
  • These steps would help curb market concentration, support smaller competitors, and maintain innovation incentives.
• Role of the Digital Personal Data Protection Act, 2023: Regulates data collection, consent, and usage, complementing competition law.
  • However, lack of coordination between the Competition Commission of India (CCI) and the Data Protection Board of India limits effectiveness in handling overlapping concerns.
• Global Lessons & Best Practices:
  • India can learn from the EU’s approach, where competition law integrates with:
    • The Digital Markets Act (DMA) to regulate big tech companies.
    • General Data Protection Regulation (GDPR) to ensure data privacy and fair competition.
• Need for Regulatory Evolution: To fully harness digital transformation, India must modernize its regulatory framework.
  • The Economic Survey 2024-25 highlights India’s rapid digital growth and the rising importance of Artificial Intelligence (AI) in the economy.
  • As tech giants expand influence, regulations must not only keep pace but also anticipate future challenges.

Conclusion

While the Meta case serves as a pivotal moment in India’s efforts to regulate digital markets and address the complexities of data-driven monopolies, it also highlights the need for a more comprehensive and forward-looking approach to competition law.