Wed Feb 04 03:23:37 UTC 2026: # Indian Supreme Court Challenges Meta’s Data Practices, Threatening Business Model

The Story:
The Indian Supreme Court is scrutinizing Meta’s WhatsApp privacy policy, challenging the company’s data collection and usage practices. A three-judge Bench, led by Chief Justice Surya Kant, suggested that user “consent” within a monopolistic platform might be legally unsound, questioning whether the dominance of Meta renders data sharing coercive. The court’s concerns extend beyond privacy to the fundamental economics of the internet, potentially forcing Meta to fundamentally alter its business model in India. The Supreme Court is preparing for interim directions on February 9, 2026.

Key Points:

  • The Supreme Court is reviewing Meta’s appeal against penalties imposed due to WhatsApp’s 2021 “take-it-or-leave-it” privacy policy update.
  • The Competition Commission of India (CCI) initially penalized Meta with a ₹213.14 crore (approximately $25 million) fine for abusing its dominant market position.
  • The National Company Law Appellate Tribunal (NCLAT) upheld the CCI’s finding but softened the regulatory blow by removing a key directive that would have prevented Meta from sharing user data with other entities for advertising purposes for five years.
  • Justice Joymalya Bagchi raised the issue of “rent-sharing” of data, questioning who owns the profit derived from using Indian citizens’ data for targeted advertising.
  • The court issued an ultimatum: Meta must provide an undertaking to stop sharing personal data or face the dismissal of its case and “very strict conditions.”
  • The Solicitor General remarked that users are “not only consumers, but also products”.

Key Takeaways:

  • The Indian judiciary is increasingly skeptical of Meta’s data practices and the notion of “consent” within a dominant platform context.
  • The case highlights the global tension between data privacy, antitrust concerns, and the economic value of user data.
  • India’s approach, influenced by the European Union’s Digital Services Act, suggests a shift towards greater data sovereignty and user protection compared to the US approach.
  • The outcome could set a precedent for how multinational tech companies operate in India, influencing data privacy regulations and potentially affecting their revenue models.
  • The Indian government’s involvement (through the Ministry of Electronics and Information Technology) signals the seriousness of the issue and potential policy changes.

Impact Analysis:

The Indian Supreme Court’s stance against Meta’s data practices has significant long-term implications. If the court rules against Meta and enforces stricter data protection measures, it could:

  • Force Meta to restructure its data collection and usage policies in India, potentially impacting its advertising revenue and business model.
  • Encourage other countries to adopt similar regulatory approaches, leading to a broader shift in global data privacy standards.
  • Empower Indian citizens with greater control over their data and its economic value, potentially leading to new business models centered around data ownership and sharing.
  • Increase scrutiny of other tech companies operating in India, leading to greater compliance with data privacy regulations.
  • Catalyze legislative action further defining data ownership and usage rights.

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