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Will the CCI’s actions form a huge challenge for Whatsapp in India?

With Whatsapp trying to counter other obstacles, can they enact upon the biggest market in the world has to face this privacy

Because of advances in mobile technology, the world is evolving rapidly. Mobile applications, also known as Mobile Apps, are almost challenging to skip these days. The majority of people will vouch for the different smartphone apps that they use regularly. Several people are entirely reliant on the use of such software in their daily lives. Technology is rapidly emerging, and its implications for the general public must be investigated and evaluated. WhatsApp is one of the most important mobile app communication developments globally; its user base is steadily expanding on both mobile phones and computers.

WhatsApp has only been around for a short time, but it has received daily updates that have improved its functionality since its launch. Some of its features were also modified recently after the start of this online survey so that they couldn’t be adequately answered. WhatsApp was primarily created to exchange SMS messages with a cross-platform feature. WhatsApp sends and receives messages over a mobile network or a local area network. Users can easily send images, video, and audio media messages in addition to text messages. Several electronic communication services for smartphones have been introduced since the widespread adoption of smartphones, but WhatsApp has been the most popular.

WhatsApp, on the other hand, has been criticized in the past for its lack of protection. Because of the carelessness with which the application was secured, it became an easy target for attackers. In 2011, for example, a flaw in the app verification process was discovered, demonstrating that the authentication mechanism was insecure. Researchers could hack legitimate usage sessions by successfully hijacking multiple user accounts (a method known as session hijacking). This allowed unauthorized entry, allowing an intruder to impersonate the sender’s identity and thus receive messages intended for the victim.

Outside of Blackberry’s BBM, WhatsApp was the only free messaging service that allowed users to log in with their phone numbers at the time. WhatsApp was an instant hit, with 250,000 active users in no time. Acton persuaded a group of fellow ex-Yahoo workers to put up 250,000 dollars in seed money due to this. Later that year, WhatsApp added multimedia messaging, and it was launched on Android the following year. Since then, WhatsApp has become one of the most popular applications on both iOS and Android, ranking in the top three most downloaded apps on both platforms. By October 2011, one billion messages had been sent every day, and WhatsApp may have 200 million active users by early 2013.

Rise of Whatsapp

Naturally, this expansion has attracted investment even though WhatsApp revenue is virtually non-existent. Sequoia Capital made an 8 million dollars investment in April 2011 after eight months of talks and a further 52 million dollars in February 2013. This resulted in a 1.5 billion dollar valuation for WhatsApp. The messaging service had piqued the attention of more than just venture capital firms by this point. Facebook saw WhatsApp as a challenge to its benefit and flexed its muscles in response. It made the 19 billion dollar acquisition of WhatsApp in February 2014, which remains the most significant acquisition to date and one of the largest tech acquisitions in history (1).

According to mobile research firm App Annie, WhatsApp was the most popular app in India in 2020, with the most monthly active users. This may change in 2021 as users migrate away from WhatsApp due to privacy issues, but WhatsApp dominated in a restricted 2020. In terms of capturing users’ attention, the instant messaging app outperformed leading social apps like Facebook and Instagram, with users spending an average of 21 hours a month on the app. However, Telegram, which is a close rival to WhatsApp, topped the list of the country’s most successful social apps. Telegram currently has 500 million monthly users, with 25 million new users joining in the three days following the WhatsApp debacle (2).

In February 2017, India had about 200 million monthly active users. (3). With over 460 million active users, India is the world’s second-largest internet market. It was expected that by 2023, there would be around 666 million internet users. Surprisingly, over 390 million of these users used their cell phones to access the Internet. In India, social media apps’ use was correspondingly strong due to a mobile-friendly Internet approach. According to reports, about 29 percent of the total population will be active social media users by 2021. Facebook, YouTube, and WhatsApp were among the country’s most popular social networking sites.

The mobile messaging app’s high penetration was unsurprising, given that the app’s use has been rapidly growing over the last few years. Even though the majority of WhatsApp users live in cities, rural areas are increasingly adopting the app. This adoption trend was seen across all socioeconomic classes. When the use of social media grew, so did concerns about the integrity of information posted on these sites, contributing to a rise in fake news and cybercrime.

Whatsapp’s Privacy Policy

Around the middle of January, WhatsApp users got an in-app alert about the service’s updated terms and privacy policy. The note addresses three significant improvements to WhatsApp’s data collection, how companies can use Facebook-hosted platforms to store and manage their WhatsApp conversations, and how WhatsApp will eventually work with Facebook to provide deeper integrations across all of Facebook’s items. It says that these updates will take effect on February 8 and that users will have no choice but to accept them if they want to keep using WhatsApp (4).

The updated terms and privacy policy update follows a similar move revealed by WhatsApp in July of last year. WhatsApp did, however, offer users the option to “not have your WhatsApp account details shared with Facebook” in a previous update. WhatsApp has removed this option in the most recent update, and users will have to acknowledge the current terms and privacy policy to continue using the instant messenger. If you agree to the changes, the following is the data WhatsApp will share with other Facebook companies: “The information we share with other Facebook Companies includes account registration information (such as your phone number), transaction data, service-related information, information on how you interact with others (including businesses) when using our Services, mobile device information, your IP address, and other information described in the Privacy Policy section (5).

The implied data sharing, combined with a healthy dose of cynicism and mistrust in Facebook, and WhatsApp’s inability to adequately justify the changes to users, resulted in a perfect storm of misinformation circulating on the Internet. The backlash against both the platform was so intense that it catapulted rival networks like Signal and Telegram to the top of the Google Play and Apple App Store charts. Both services attract millions of users in just a few days. Indeed, Signal’s growing popularity has proved to be too much for its servers, leading to some slowdown.

WhatsApp sought to explain the updates to its terms of service and privacy policies, claiming that the new terms did not affect user messages or contacts’ privacy. Many WhatsApp and Facebook executives took to social media to assuage fears. The company published a lengthy FAQ page to address some of the more common concerns posed in response to the ToS and privacy policy update. In essence, WhatsApp is clarifying how it gathers and uses data when a user messages a company, rather than extending its ability to exchange data with Facebook. WhatsApp is unable to see personal communications because messages are encrypted end-to-end (6).

Furthermore, according to the website, they do not keep track of who you message or connect to your contacts, nor do they have access to your shared location. However, due to widespread concerns regarding the new Terms of Service and Privacy Policy, WhatsApp announced today that it has agreed to postpone the date by which users must approve the new Terms of Service and Privacy Policy. The new deadline had been set for May 15, 2021. The Terms of Service and Privacy Policy aren’t changing, but allowing users more time to understand them will help them decide whether to leave WhatsApp for another platform or stick with it (7).

India’s reaction to the Policy

In its order, the CCI alleged that the firm had violated competition laws by engaging in exploitative and exclusionary actions under the guise of policy updates. In this regard, the CCI has also instructed the investigation unit to conduct an investigation and send a report within the next 60 days. Typically, such inquiries take several months, but in WhatsApp, the watchdog has given the company 60 days. According to the CCI, how WhatsApp can exchange data appears to be neither wholly transparent nor dependent on explicit and voluntary user consent. This seems to be unjust to consumers. According to reports, the firm informs the regulator that the policy change raises no competition law issues (8).

WhatsApp said that it would engage and cooperate with the Commission and commit to protecting encryption. The organization will also be transparent on how the latest business features run. The company had previously stated that the changes only affected users’ experiences with businesses in a statement. The company has stated that end-to-end encryption would secure people’s communications and that neither WhatsApp nor Facebook will access these messages. WhatsApp says that it does not keep track of who contacts or notes whom and cannot access shared locations and other information.

“In light of WhatsApp’s marketplace and market strength, the Commission is of the prima facie opinion that the ‘take-it-or-leave-it essence of its privacy policy and terms of service, as well as the information sharing stipulations listed therein, warrant a thorough investigation,” it said. According to WhatsApp’s submissions, the 2021 update will not increase its ability to exchange Facebook data. Still, it will provide users with more transparency on how WhatsApp gathers, uses, and shares data. However, according to CCI, the veracity of such statements will be investigated by the DG during the inquiry. The Commission also stated that as owners of their data, users have the right to know the extent, reach, and precise intent of WhatsApp’s sharing of such data with other Facebook companies (9).

“However, several of the data categories described therein tend to be too broad, ambiguous, and indecipherable,” it said, citing the Privacy Policy and Terms and Conditions (including the FAQs published by WhatsApp). The actual data expense that a consumer incurs for using WhatsApp services is obscured by obscurity, vagueness, open-mindedness, and insufficient disclosures, it added. (10) Furthermore, the regulator stated that the Policy does not specify whether users’ statistical data will be shared with Facebook firms or whether data will be exchanged with WhatsApp users who are not using other Facebook applications.