Meta Platforms, the parent company of Facebook and WhatsApp, has contested a Rs 213.1 crore penalty imposed by the Competition Commission of India (CCI) at the National Company Law Appellate Tribunal (NCLAT). The penalty stems from WhatsApp's privacy policy update in 2021, which raised concerns about data sharing practices between WhatsApp and other Meta companies.

Legal Arguments

Meta's legal team presented several arguments challenging the CCI's decision:

1. Lack of Concrete Evidence: Meta contended that the CCI failed to identify any actual conduct that denied market access to rivals, instead basing its case on hypothetical scenarios rather than present conduct.

2. Market Definition: The company argued that the CCI erroneously defined a narrow relevant market for 'online display advertising' without considering substitutable services like search advertising or offline advertising.

3. Impact Assessment: Meta stated that the CCI did not demonstrate actual effects of WhatsApp's 2021 privacy policy update on the advertising market or consult advertisers about available services.

Current Status

In a significant development, the NCLAT has stayed the five-year ban on data-sharing practices between WhatsApp and Meta for advertising purposes. This stay order provides temporary relief to Meta while the case is being heard.

CCI's Original Order

The CCI's order included several directives:

1. A monetary penalty of Rs 213.1 crore on Meta Platforms.
2. Implementation of behavioral remedies.
3. A ban on WhatsApp sharing user data with other Meta companies for advertising purposes for five years.

Next Steps

The legal battle is set to continue, with the CCI scheduled to present its arguments on September 18-19. The outcome of this case could have significant implications for data privacy practices and competition in the digital advertising market in India.

This case highlights the ongoing global debate surrounding data privacy, competition in the tech industry, and the regulatory challenges faced by large technology companies operating across multiple jurisdictions.

Meta Platforms and TikTok have scored a significant legal victory against the European Commission in a dispute over supervisory fees under the Digital Services Act (DSA). The Luxembourg-based General Court ruled in favor of the tech giants, challenging the methodology used to calculate these fees.

Court Ruling and Implications

The court found that the European Commission's approach to determining supervisory fees should have been adopted through a delegated act rather than implementing decisions. This procedural misstep has led to a 12-month window for EU regulators to rectify their methodology using the proper legal procedures.

Fee Structure and Affected Companies

Under the contested fee structure, large online platforms, including Meta and TikTok, were charged a supervisory fee of 0.05% of their annual worldwide net income. This fee was intended to cover EU monitoring costs associated with the Digital Services Act enforcement.

Other tech companies subject to similar fees include:

• Amazon
• Apple
• Google
• Microsoft
• X (formerly Twitter)
• Snapchat
• Pinterest

Financial Impact and Next Steps

Despite the court's ruling, Meta and TikTok will not receive refunds for their 2023 fees while regulators work on developing a new legal basis for the fee structure. The European Commission maintains that the court's decision confirms the soundness of their fee methodology, requiring only a formal procedural correction.

Digital Services Act Overview

The Digital Services Act is a landmark EU regulation that requires large online platforms to tackle illegal content or face substantial fines of up to 6% of their global turnover. This act represents a significant step in the EU's efforts to regulate the digital space and ensure user safety online.

Conclusion

This legal victory for Meta and TikTok highlights the complex regulatory landscape that tech companies navigate in the European Union. As the European Commission works to address the procedural issues identified by the court, the tech industry will be watching closely to see how this impacts the implementation and enforcement of the Digital Services Act going forward.