The Competition Commission of India (CCI) has dismissed a case against WhatsApp that alleged the messaging platform abused its market dominance to launch WhatsApp Pay in India.
The antitrust watchdog said WhatsApp Pay was available to “less than 1%” of WhatsApp users in India in its beta version, and that it is actually “yet to manifest in the market”.
The case against WhatsApp was brought by lawyer Harshita Chawla.
The ruling clears a hurdle for the Facebook-owned platform’s quest to capitalise on India’s fintech ecosystem. Facebook CEO Mark Zuckerberg recently said the company could look to bring payments to other countries after testing it in India. WhatsApp has more than 400 million users in India, making it its biggest market in the world. The CCI case was one of two that have been keeping WhatsApp from launching its full-fledged payments service in India. The launch of WhatsApp Pay has been said to be important for Facebook to capitalise on its association with Mukesh Ambani-led Reliance Jio, whose grocery delivery service, JioMart, is already allowing users to make orders through WhatsApp. With a payments service, the integration between the two platforms could be further improved.
While it dismissed the antitrust allegation, the regulator did observe that WhatsApp is indeed dominant in the over-the-top (OTT) messaging space. This might be important for future antitrust cases and rulings pertaining to the technology space.
“CCI have clearly said that while you may say this space is for user attention, it has its compartments. So you can’t substitute a Facebook, where you post content, with a WhatsApp, which is about live chats. That could make several players cautious of their behaviour in the future, because they could be dominant in their very small niches, so to speak,” said Kanika Chaudhary Nayar, Partner at L&L Partners.
The CCI said that the fact that a user has to “separately register” for WhatsApp Pay and accept its terms of service and privacy policy means users will still have to choose to opt into the service. It also noted that WhatsApp has “categorically ensured, in its written statement” that users will have the discretion to use or not use WhatsApp Pay, which means that they can choose to use a different payment app.
The CCI also observed that there isn’t sufficient evidence to show that Facebook and WhatsApp share user information, and hence this cannot be a concern in this case. However, it did recognise that both companies “undeniably deal” with customer-sensitive data, which could be misused and “may raise potential antitrust concerns” among other data protection issues.
