HC refuses to stay CCI notice to Facebook, WhatsApp in privacy policy matter

The Delhi High Court has refused to stay the Competition Commission of India (CCI) notice asking Facebook and WhatsApp to furnish certain information in relation to a probe ordered by it into the instant messaging app’s new privacy policy.

A vacation bench of Justices Anup Jairam Bhambhani and Jasmeet Singh said an application seeking stay of further steps in the investigation has been filed in which notice was issued to the Director General of CCI and no interim relief was given by the division bench on May 6. It is listed for consideration on July 9.

“We also find that there is substantial overlap, in fact near identity, as between the prayers made in... (earlier application) and those made in the present application. For the foregoing reason, we do not consider it appropriate to stay the operation of impugned notice dated June 4, at this stage,” the bench said in its order passed on June 21 and made available on Wednesday.

The bench said there was no doubt that the June notice by the DG is a step in furtherance of the investigation commenced in suo motu case pursuant to order of March 24, which is the subject matter of the challenge in the present appeals.

In their fresh applications filed in the pending appeals, Facebook and WhatsApp have sought stay on the CCI’s notices asking them to furnish certain information for the inquiry conducted by it. The notices were issued to WhatsApp and Facebook on June 4 and June 8 respectively.

The case relates to the appeals of Facebook and WhatsApp against a single judge order dismissing their pleas against the probe CCI ordered into the instant messaging app's new privacy policy.

The high court had on May 6 issued notices on the appeals and asked the Centre to respond to it.

The high court, in its June 21 order, noted that Additional Solicitor Generals (ASG) Aman Lekhi and Balbir Singh, representing CCI, submitted that though the issuance was perfectly in line with the procedure contemplated under the statute for taking forward an on-going investigation, which has not been stayed by the division bench, it would take substantial time for preparing a report after the receipt of the information called-for.

Once the report is prepared, it would be then forwarded to the CCI, they said, adding that the preparation of the report would not be completed at least before the next date of hearing before the roster division bench on July 7.

“Taking note of...(Lekhi and Singh’s) statement as above, we would only urge the DG to bear in mind that investigation against the appellant (Facebook and WhatsApp) is under judicial consideration before a division bench of this court; and we direct that the matter be listed before the roster division bench on July 9, the date already fixed,” the vacation bench said and issued notice on the fresh applications.

During arguments on the applications, senior advocate Harish Salve, representing WhatsApp, had said the problem was that they have received a fresh notice on June 4 and the last date to respond was June 21.

He had said the privacy policy was already under challenge in the Supreme Court and the Delhi High Court by way of a batch of petitions and even the government is looking into it.

Senior advocate Mukul Rohatgi, appearing for Facebook, had said the question here was of propriety and it was not correct as the highest court of the country, that is, the Supreme Court is looking into the matter.

Both the senior advocates had submitted that in view of the DG’s demand for information within 15 days of receipt of notice on pain of penalty, it is clear that the DG proposes to take action against the appellants, without awaiting a decision of the pending issues by the division bench, in an act of overreach of the judicial process, which deserves to be stayed.

ASG Lekhi had opposed the pleas saying at the stage of inquiry furnishing of information will not lead to any order by the CCI and the notice is in pursuance to the inquiry which was not stayed by the high court and that this not the first notice issued to them.

ASG Singh had said since there is a statutory order against Facebook and WhatsApp, they should not use the high court’s order and say that they will not furnish the information sought by CCI and the information should not be stalled at this stage.

The single judge on April 22 had said though it would have been "prudent" for the CCI to await the outcome of petitions in the Supreme Court and the Delhi High Court against WhatsApp's new privacy policy, not doing so would not make the regulator's order "perverse" or "wanting of jurisdiction".

The court had said it saw no merit in the petitions of Facebook and WhatsApp to interdict the investigation directed by the CCI.

The CCI had contended before the single judge that it was not examining the alleged violation of individuals' privacy which was being looked into by the Supreme Court.

It had argued before the court that the new privacy policy of WhatsApp would lead to excessive data collection and "stalking" of consumers for targeted advertising to bring in more users and is therefore an alleged abuse of dominant position.

WhatsApp and Facebook had challenged the CCI's March 24 order directing a probe into the new privacy policy.

In January, the CCI on its own decided to look into WhatsApp's new privacy policy on the basis of news reports regarding the same.