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CCI dismisses petition alleging WhatsApp abused dominance to enter UPI market

The Competition Commission of India on Tuesday dismissed a petition against WhatsApp that argued that the company was abusing its dominant position in messaging to enter and expand into India’s UPI payments market. A petition filed in March, by Harshita Chawla, alleged that WhatsApp was forcing its payment product onto existing messaging users, as the payments services was embedded into the existing app, among other claims. As of July 2019, WhatsApp had 400 million users in India.

With regard to the bundling allegation, CCI noted that users were not forced to use WhatsApp payments, but have the choice to register for UPI payments. Besides, the UPI market already has established competitors such as Google Pay, Paytm, Amazon Pay backed by large investors, it noted, adding that WhatsApp payments is unlikely to get a considerable market share only on the basis of preinstallation.

Although the commission found WhatsApp to be the dominant player in the OTT messaging apps sector, it dismissed any allegations of abuse of this dominant position. The Commission threw out the petition declaring that “there exists no prima facia case of contravention” of competition laws. Since WhatsApp’s UPI payments service has been in beta since February 2018, and is yet to launch for the public, “its actual conduct is yet to manifest in the market”, the commission said. Besides, “…the number of users being served under the beta version is limited to less than 1% of its users in India,” the commission noted.

Chawla had also raised claims of WhatsApp’s non-compliance of critical and mandatory procedural norms pertaining to data localisation and storage, and also concerns around data security. These do not seem to raises any competition concern and as such may not need any further scrutiny by it.

Facebook and WhatsApp both opposed the petitioner’s claim that WhatsApp automatically shares WhatsApp Pay users data with Facebook for targeted advertisements, the CCI’s order said. “However, this is neither any concrete allegation, nor any specific information to support the competition concern of the Informant,” the CCI said.

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