Watchdog Competition Commission dismisses complaint against WhatsApp

The Competition Commission has dismissed a complaint of alleged unfair business practices by popular messaging platform WhatsApp with respect to the digital payments market in the country.

It was alleged that Facebook-owned WhatsApp has abused its dominance in the market for internet-based messaging applications through smartphones to manipulate another market — market for UPI enabled digital payment applications in its favour.

The complaint alleged that WhatsApp was abusing its position by forcing its payments feature on to its existing users.

In a 41-page order, the Competition Commission of India (CCI) said there was no violation of Section 4 of the Competition Act. This section pertains to abuse of dominant position.

The CCI added that the company’s “actual conduct is yet to manifest in the market” as it has not fully launched the service yet.

“As stated by WhatsApp, the number of users being served under the beta version is limited to less than 1 percent of its users in India,” the order noted.

To assess the complaint, the watchdog considered two relevant markets — market for Over-The-Top (OTT) messaging apps through smartphones in India and market for UPI (Unified Payment Interface) enabled Digital Payments Apps in India.

According to the regulator, the informant has contended that WhatsApp will leverage its dominance in the upstream market to have a competitive edge over existing competitors.

The informant also seems to be distressed by the fact that while the other existing players spent considerable resources to establish themselves in the UPI-enabled digital payment app market, WhatsApp will get users on its platter without making any efforts, CCI said in the order.

“The apprehensions of the informant, according to Commission, does not really hold much merit. As stated above, the UPI market is quite established with renowned players competing vigorously. In such a market, it seems implausible that WhatsApp Pay will automatically garner a market share merely on account of its pre-installation,” it noted.

More so, given the fact that WhatsApp ecosystem does not involve paid services as such for normal users, it seems unlikely that the consumer traffic will be diverted by WhatsApp using its strength in the messenger market, as per the order dated August 18.

Regarding the informant’s claims that WhatsApp is in serious non-compliance of critical and mandatory procedural norms pertaining to data localisation and storage, the regulator said that they “do not seem to raise any competition concern and as such may not need any further scrutiny by it”.

Meanwhile, the Supreme Court is separately hearing cases challenging the expansion of WhatsApp payment service.