Delhi High Court rejects plea to stay CCI notice to WhatsApp

Delhi High Court rejects plea to stay CCI notice to WhatsApp

The Court urges DG, CCI to keep in mind that the appellant is under judicial consideration during the investigation against WhatsApp

The Delhi High Court (HC) Wednesday rejected a plea seeking stay on the notice issued by the Competition Commission of India (CCI) against social media giant WhatsApp LLC over the platform's new privacy policy.

A Division Bench of Justices Anup Jairam Bhambhani and Jasmeet Singh, however, urged the Director General (DG) of CCI to keep in mind that WhatsApp is under judicial consideration while conducting investigations.

The DG, CCI had issued notice to WhatsApp on 4 June 2021 in this case. "We would only urge the DG, CCI to bear in mind that investigation against the appellant (WhatsApp) is under judicial consideration before a Division Bench of this court," the bench said.

The bench also observed that there is no doubt that the issuance of impugned notice by the DG is a step in furtherance of the investigation commenced in the suo-motu case. "Ín our view, there is no doubt that the issuance of the impugned notice dated by DG is a step in furtherance of the investigation commenced in Suo-Motu case No. 1/2021 pursuant to order dated 24.03.2021, which investigation is subject matter of the challenge in the present LPA," the HC said.

"For the foregoing reason, we do not consider it appropriate to stay the operation of impugned notice dated 04.06.2021, at this stage," says the bench said.

WhatsApp had updated its privacy policy earlier this year. It had given users time till 15 May to accept the new policy. WhatApp's contentious policy was challenged through several petitions both in the Supreme Court and the Delhi High Court.

Senior Advocate Harish Salve, appearing on behalf of WhatsApp LLC submitted that while the present LPA is pending before a Division Bench of this court, in an act that smacks of overreach, the DG has issued notice dated June 4, 2021, purporting to be under section 41(2) read with section 36(2) of Competition Act 2002, demanding from the appellant information and response to certain queries, which are 22 in number, and which are already the subject matter of the challenge in the LPA.

Advocate Salve also informed the court that related challenges are also pending before the Supreme Court.

Additional Solicitor General, Aan Lekhi, appearing for the CCI stated that he has instructions to say that though the issuance of notice dated 4 June 2021 was perfectly in line with the procedure contemplated under the statute for taking forward an ongoing investigation, which has not been stayed by the Division Bench.

Lekhi informed the court that it would take substantial time for the preparation of a report pursuant to the receipt of the information called for by way of the impugned notice; which report would thereafter be forwarded to the Competition Commission of India.

ASG Lekhi accordingly submitted that preparation of the report would not be completed at least before the next date of hearing before the Roster Division Bench i.e., 9 July 2021.

The Delhi High Court had earlier this week reserved its order on WhatsApp LLC plea challenging CCI's notice seeking certain information regarding the messaging application's privacy policy.

The CCI notice was challenged before a single-judge bench of the Delhi HC on 22 April 2021. The judge observed that it would have been "prudent" for the CCI to wait for the outcome of the petitions filed before the SC and the HC.

The counsel appearing for CCI had argued that WhatsApp's new privacy policy could lead to excessive data collection and stalking of users for targeted advertising.

The social media platforms, however, countered this by arguing that the CCI had drifted far away from the competition aspect and was instead looking into the privacy issue which was already under review by the Supreme Court.