Blanket ban on data sharing will hurt small biz, WhatsApp tells SC

ONline electronic messaging political program WhatsApp on mon told the sublime margaret court that it does not read users’ personal messages, sell user data, or use private chats to target advertisements, asserting that all personal communications remain end-to-end encrypted and inaccessible even to the company.At the same time, it cautioned that a blanket prohibition on any data sharing with its parent, Meta Platforms, would be detrimental in multiple ways -- undermining user choice, impairing legitimate business functions, and adversely affecting thousands of small Indian enterprises that depend on digital advertising to survive.Opposing a complete embargo on data sharing, WhatsApp argued that such a restriction would be disproportionate and contrary to the balance sought to be achieved by competition and privacy regulators. It submitted that a total ban would remove users’ ability to opt into certain features, weaken safeguards designed to measure advertising effectiveness and prevent fraud, and disrupt an ecosystem that enables micro, small and medium businesses to reach customers cost-effectively.The company made these submissions in an affidavit filed before a bench of Chief Justice of India Surya Kant and justices Joymala Bagchi and Vipul M Pancholi, which is hearing a batch of appeals and cross-appeals by WhatsApp, Meta and the Competition Commission of India (CCI) against the November 4, 2025 ruling of the National Company Law Appellate Tribunal upholding a ₹213.14 crore penalty over WhatsApp’s 2021 privacy policy.In November 2024, CCI held that WhatsApp had abused its dominant position in the messaging market by imposing a “take-it-or-leave-it” privacy policy that expanded data sharing with Meta as a condition for continued access to the service. While NCLAT upheld the monetary penalty, it set aside CCI’s five-year ban on data sharing for advertising purposes, observing that such a restriction could disrupt WhatsApp’s business model. The tribunal later restored user-choice safeguards and directed WhatsApp to implement clearer opt-out mechanisms.During the previous hearing on February 3, the bench led by CJI Surya Kant expressed deep skepticism over WhatsApp’s consent framework, calling the policy a “decent way of committing theft of private information” and observing that users “pay” for the supposedly free service with their data. The court restrained WhatsApp from sharing any user data in the interim and warned it would not permit the “exploitation of even a single” Indian citizen’s personal data.On Monday, senior counsel Kapil Sibal, appearing for Meta, told the court that the company would not press for an interim stay of NCLAT’s directions and would comply with a previous CCI order by March 16. This directive requires WhatsApp to give users greater control over whether their data is shared with other Meta companies. The main appeal in the matter will now be heard on merits later.In its affidavit, WhatsApp said it had addressed the court’s concerns about how the platform functions. It reiterated that “personal messages and calls are protected by end-to-end encryption” and that no one outside a chat, “not even WhatsApp.” can read their contents. It said it does not store logs of users’ personal messaging or calling histories and does not share message content or users’ contact lists with Meta.Responding to the CJI’s earlier remarks that users appear to receive advertisements for medicines or health care soon after seeking medical advice over WhatsApp, the company said that private exchanges cannot result in targeted advertisements on Facebook or other Meta platforms. If a user sees hospital or medicine-related advertisements, it said, this is likely due to “search or browsing activity on other platforms, not WhatsApp messages.”WhatsApp maintained that it does not sell user data and that advertisements on Facebook are based on activity within Facebook, information voluntarily disclosed by users, or data shared by advertisers and partners — not encrypted chat content.On data sharing, the company drew a distinction between “personal messaging and optional business features.” Limited, non-message information may be shared with Meta when users engage with features such as “Click-to-WhatsApp” advertisements on Facebook or Instagram. In such cases, Meta may receive signals that an interaction took place to measure advertising effectiveness and prevent fraud, but message content, phone numbers and contact lists are not shared. Similarly, when users voluntarily sign up to receive marketing messages from businesses, limited interaction data may be shared, but not the contents of communications. Users, it argued, remain free to use WhatsApp for personal chats without engaging with these features.“A ban removes user choice and undermines users’ control over their privacy – the very control and choice that the Tribunal and the Commission sought to restore. Users who want to share their data to enhance their own experience would not be able to do so,” WhatsApp said, adding that “Such a blanket ban is not envisaged even under privacy and data protection laws,” it has said.At the core of its defence, WhatsApp argued that a blanket ban will harm Indian micro, small and medium enterprises. “Around 200,000 Indian advertisers use Facebook and Instagram ads that direct customers to WhatsApp, including kirana stores, family-run shops, repair services, independent sellers and startups with limited budgets. Targeted ads linked to WhatsApp chats allow such businesses to reach interested consumers in a cost-effective manner,” the company said.