Competition Commission Rejects Complaint Against WhatsApp

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

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

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

To assess the complaint, the watchdog considered two relevant markets -- ‘market for over-the-top messaging apps through smartphones in India’ and 'market for Unified Payment Interface enabled digital payments apps in India'.

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

The informant also seemed 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 would get users on its platter without making any efforts, CCI said in the order.

"The apprehensions of the informant, according to Commission, does not 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 regular 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".