NEWS: [WhatsApp Pay] Competition Commission of India Rejects Plea Claiming Misuse of Dominant Status by WhatsApp and Facebook

By Legal Wires 4 Minutes Read

The Competition Commission of India has rejected a request which sought inquiry against WhatsApp and Facebook for suspected abuse of dominant position by spinning out the WhatsApp Pay feature.

Harshita Chawla, a lawyer, had advanced the Commission claiming that Facebook backed WhatsApp, is disrespectful of the provisions of Sec. 4 of the Competition Act, by using its supremacy on the internet based instantaneous messaging App, is shoving its messaging App with the payment option (WhatsApp Pay) thereby using such supremacy to penetrate the UPI allowed Digital Payments App Market. She argued that, by allowing an automatic system of WhatsApp Payments App in the WhatsApp Messaging App, WhatsApp is alleged to be taking benefit of its enormous userbase to promote its recently launched WhatsApp Pay App. Hence, she requested an inquiry against WhatsApp under the Act & instructions to restrain it from ongoing with the ‘WhatsApp pay’ highlight. The Committee prima facie found WhatsApp to be influential in the first pertinent market, i.e., sell for OTT messaging apps through smartphones in India. The Committee observed that the vital requirements of tying are:

  • the knotting and tied products are 2 distinct products
  • the entity involved is influential in the market for the tying good
  • the consumer does not have an option to only acquire the tying product without the tied manufactured goods and
  • the tying is efficient of restricting or foreclosing battle in the market.

It noted that WhatsApp Messenger & WhatsApp Pay are 2 distinct products with unique functionalities; they are, in fact, in two distinct relevant fairs. The Commission stated that while WhatsApp Pay is inserted in WhatsApp messenger app when it is copied by users on their smartphones, the consumers are at free choice to use WhatsApp Pay or any additional UPI enabled digital payments app in India to make up instant interbank transmissions. Installation of the WhatsApp messenger does not look to unequivocally mandate or intimidate the user into using WhatsApp Pay solely or into manipulating the consumer choice tacitly in any other manner, at present-day. Thus, the 3rd  condition does not seem to have been formed.

The Commission also decided with WhatsApp’s assent that the allegation is hasty as its actual behavior is yet to demonstrate in the market. Also, as said by WhatsApp, the number of users being operated under the beta version is constrained to less than 1% of its customers in India, it noted. Rejecting the case, the Commission stated that, 

“The Committee declares that Facebook & WhatsApp patiently deal with client sensitive data, which is agreeable to misuse & may raise possible antitrust worries, among other data protection matters. But, in the present issue, the Informant has only claimed that WhatsApp or Facebook have admittance to data which they are applying for doing targeted marketing. There is neither any specific allegation nor any particular information to support the match concern of the Informant. In the lack thereof, there is zero on record, which the Commission can investigate.”

Legal Wires

Team @LegalWires

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