WHATSAPP AND THE COMPETITION CONUNDRUM
Author: Priyanka Priyadarshini, II year of LL.B. from Campus Law Centre, Delhi University
The Competition Commission in the Harshita Chawla case, as well as the Delhi High Court in Chaitanya Rohilla v. UOI & Ors, based their decisions on a mirage of choice or consent that customers supposedly have. The view taken by the concerned authorities is myopic. Firstly, 97% of smartphone users in India use the app for daily communication which amounts to approximately 400 million users. This makes Whatsapp the most popular messaging app with deep market penetration. It has already been held as the dominant player in the relevant market.
Secondly, the massive market penetration causes a network effect which forces customers to stick with the app even though they might not like it. It makes it difficult to shift to other apps. Various business communication and Whatsapp groups which serve important professional and commercial purposes leave customers with no option but to remain on the app. Alternatives will become a real possibility only if every user shifts to another app. Personally, being a college student who communicates regarding classes on Whatsapp class groups, it is impossible to shift to another app until the entire university shifts as well. The network effect allows Whatsapp to work independently of other competitive forces in the market while also favouring its usage among the masses above all other competitors.
Fourthly, Facebook, the parent company, is well known worldwide for its aggressive vertical integration, acquisitions and leveraging its capital base strategies to put up entry barriers that kill competition. European Union as well as the United States have already taken steps in order to inquire and control the monopolistic tendencies of the company. Similar awareness among the Indian authorities at this stage would go a long way in protecting excellent but still a nascent Indian tech industry.
Fourthly, Facebook has been notorious for data breaches and unauthorized data disclosures. Facebook was imposed with a fine of £500,000 under GDPR by the United Kingdom for the Cambridge Analytica data breach. Several European nations have taken strict action against Facebook for breaches, unauthorized access and violations. Moreover, serious questions have been raised regarding Facebook’s advertising policy which has the potential to spread misinformation and derail democracies as witnessed by the United States of America as well as here closer home.
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Priyanka Priyadarshini is a second-year law student at Campus Law Centre, Delhi University. She was graduated in Political Science from Lady Shri Ram College for Women with a diploma degree in Conflict Transformation and Peacebuilding from ASSK Peace Centre. Corporate compliance and commercial dispute resolution are her areas of interests. She regularly researches and writes about these topics.