However, after what looked like a mass exodus to alternative messaging applications (apps) like Signal, Telegram, and iMessage, WhatsApp was back to being the top messaging app in India by late February.
Citing the initial increase in Signal and Telegram downloads, CCI noted: “However, apparently this has not resulted in any significant loss of users for WhatsApp. Further, the network effects working in favour of WhatsApp reinforces its position of strength and limit its substitutability with other functionally similar apps/platforms.”
This, in turn, causes a strong lock-in effect for users, making it difficult and meaningless to switch to another platform until all or most of their social contacts also do the same, added CCI.
The investigation has been ordered under Section 26 (1) of the Competition Act, with directions to complete the probe within a period of 60 days from the receipt of its order.
CCI has found the new policy vague and open-ended and said its incomplete disclosures hide the actual data cost a user incurs for availing of WhatsApp services.
WhatsApp has reinforced on multiple occasions that the policy does not change personal communication between people, but only impacts the way users interact with WhatsApp business accounts.
“We look forward to engaging with the CCI. WhatsApp remains committed to protecting people’s personal communications with end-to-end encryption and providing transparency about how these new optional business features work,” said a WhatsApp spokesperson.
The antitrust watchdog had taken suo motu cognisance of the matter in its ordinary meeting on January 19, on the basis of media reports and the potential impact of the policy and terms for WhatsApp users and market.
WhatsApp and Facebook responded to CCI through separate emails on February 25.
CCI said it found the responses of Facebook to its queries “not only evasive, but in clear non-compliance” of its directions. “Facebook is a direct and immediate beneficiary of the new updates and in these circumstances, it is egregious that Facebook is feigning ignorance about the potential impact of the updates altogether and avoiding from providing its perspective thereon,” the commission said in its 21-page order.
CCI also said it was not clear from the policy whether the historical data of users would also be shared with Facebook companies and whether data would be shared in respect of those WhatsApp users also who are not present on other apps of Facebook.
It said it found WhatsApp’s response that it “…has authorised its legal representatives to act, appear, plead, and file before the commission on its behalf” egregious and inconsistent with general regulations.