​Messaging power: on a healthy digital marketplace

The Supreme Court of India, last week, sharply questioned Meta Platforms LLC and its messaging platform WhatsApp, in an appeal rooted in updates it made in 2021 around user data sharing with other Meta services such as Instagram and Facebook. The Court underscored the power that WhatsApp holds in India’s messaging ecosystem: it is practically impossible to reach everyone with a smartphone, coordinate groups, and undertake business communications without being on WhatsApp. The app’s “network effect” has captured nearly every smartphone in the country. The precise background of the litigation that reached the Court is an appeal against a ₹213.14 crore penalty issued by the Competition Commission of India (CCI) for abruptly amending its privacy policy, allowing the firm to share user data across its sister concerns, Facebook and Instagram. Users were prompted at that time to accept the terms or cease using the service. This ultimatum was problematic, and understandably drew pushback from civil society, the government, and the CCI.

Nobody argues that WhatsApp must not earn money for a service that has been transformative for communications in India. Owing to its parent’s massive scale of operations, WhatsApp has been able to offer messaging, multimedia sharing, telephony — services that were until 2016 prohibitively priced by telecom operators — for free, with only an Internet connection and a phone number as a pre-requisite. WhatsApp’s enthusiastic adoption of end-to-end encryption also furthered a societal expectation for secure communications as a norm, in a country where telecommunications has always been subjected to excessive executive-led surveillance. What is equally true is that WhatsApp is so deeply embedded in Indian society that its transition to an advertising model, where it would start making money here, deserves the highest scrutiny. Competition regulators, including in India, have frowned upon ubiquitous platforms that present users with ultimatums that they can scarcely refuse. There are free alternatives to WhatsApp that work just as well — Signal, Telegram and even Arattai from Zoho are serviceable — but they lack what makes the Meta product so valuable: the guarantee that virtually everyone one knows is on it. Allowing users to “opt out” of data sharing is an inappropriate remedy for services at WhatsApp’s scale, because the power of the default option at that scale leaves far too many with no real, informed choice in the matter. The Court’s thoughts on this matter are correct, but they need to be supported by a digital competition law, a draft of which was released in 2024, but has seen little progress since. As India approaches a billion Internet users, that law is needed to protect and foster a healthy digital marketplace.