The Indian watchdog alleges the policy update breaches antitrust laws, and the probe could spell trouble for the service in one of its biggest markets.
The government in India already decided to quiz the firm over the change in January, amid widespread concern around its data-sharing policies with Facebook.
The problems for WhatsApp began back in early January 2021, when it said it would update its data sharing policy as a condition of its use going forward.
Users of the popular messaging app began receiving messages asking them to agree to new terms of service and privacy policies.
The changes were compulsory and were due to take effect on 8 February.
Users would not be able to continue using WhatsApp if they didn’t agree to the new terms and conditions.
After that triggered outrage, WhatsAp then delayed the 8 February deadline, as users flocked to rival services such as Telegram or Signal, with the latter hiring more staff to deal with the surge.
What Facebook messaging app had failed to properly explain was that the terms update was largely aimed at giving users new options for interacting with businesses and providing more clarity about how it collects and uses data.
Essentially, WhatsApp’s data-sharing policy was not changing, but the company’s notification for many users was the first time they became aware of that policy, which has been in place since 2016.
The policy allows Facebook to access a WhatsApp user’s phone number and other registration information, such as email address, as well as information about the user’s phone, the user’s IP address and any payments or financial transactions made over WhatsApp.
But personal conversations are not shared, as chats are protected by end-to-end encryption.
These data-sharing terms don’t apply in the UK or the EU, which have different privacy laws.
In 2016 WhatsApp gave existing users a limited time to opt out of the data-sharing arrangement, and if users opted out at that time, their choice will continue to be respected.
But the fact that user agreement to the WhatsApp policy update was mandatory, triggered widespread concern and a backlash.
But now Reuters has reported that the Competition Commission of India (CCI) has alleged that WhatsApp has violated competition laws “through its exploitative and exclusionary conduct … in the garb of policy update.”
The 21-page order also reportedly asked its investigation unit to conduct the probe and submit a report within 60 days.
WhatsApp’s conduct in sharing users’ data with other Facebook firms, in a way that is “neither fully transparent nor based on voluntary and specific user consent”, appears unfair to users, the watchdog reportedly added.
The CCI said WhatsApp had told the antitrust body that the policy update, which becomes effective in May, raised no competition law concerns.
WhatsApp did not immediately respond to a request for comment on Wednesday.
The antitrust order also comes as WhatsApp sets out to expand its digital payment services to millions of Indians, Reuters reported.