Connect with us

Company News

WhatsApp must be investigated on whether it is fiddling with private data

The suo motu order by the Competition Commission of India (CCI) to launch an investigation into WhatsApp’s new privacy policy is a laudable assertive exercise of its statutory role as a guardian of Indian consumers’ rights and ensuring a free unhindered competition in the market. In January this year, Facebook-owned WhatsApp caused a huge uproar by unilaterally asking its users to accept new terms allowing it to share more private information with parent Facebook for advertising and commercial purposes. What added to the outrage was that if you lived in an EU region, they would not be able to do it, it would be forbidden under their General Data Protection Regulation (GDPR), raising strong demand for urgency in similar Indian data protection law.

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.

While thinking about regulations for large technology companies in India, it is critical to carefully consider the trade-off between allowing access and protecting consumer privacy. Encroachment of privacy and fiddling with private data can take the form of non-price competition. As rightly concluded by CCI, non-price parameters in a digital market can have great potential to distort market competition (bit.ly/2Pu4cvk). The extent to which a consumer can ‘freely consent’ to an action by a dominant player is of paramount importance as companies pursue data aggregation. In the case of WhatsApp’s new privacy policy, it was a ‘take it or leave it’ proposition, violative on several counts.

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. ToI

 

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2024 Communications Today

error: Content is protected !!