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The Competition Law Case Against Whatsapp’s 2021 Privacy Policy Alteration
http://editors.cis-india.org/internet-governance/blog/the-competition-law-case-against-whatsapp2019s-2021-privacy-policy-alteration
<b>Having examined the privacy implications of Whatsapp's changes to its privacy policy in 2021, this issue brief is the second output in our series examining the effects of those changes. This brief examines the changes in the context of data sharing between Whatsapp and Facebook as being an anticompetitive action in violation of the Indian Competition Act, 2002. </b>
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<h3 style="text-align: justify;">Executive Summary</h3>
<p style="text-align: justify;" dir="ltr">On January 4, 2021, Whatsapp announced a revised privacy policy through an in-app notification. It highlighted that the new policy would impact user interactions with business accounts, including those which may be using Facebook's hosting services. The updated policy presented users with the option of either accepting greater data sharing between Whatsapp and Facebook or being unable to use the platform post 15th May, 2021. The updated policy resulted in temporarily slowed growth for Whatsapp and increased growth for other messaging apps like Signal and Telegram. While Whatsapp has chosen to delay the implementation of this policy due to consumer outrage, it is important for us to unpack and understand what this (and similar policies) mean for the digital economy, and its associated competition law concerns. Competition law is one of the sharpest tools available to policy-makers to fairly regulate and constrain the unbridled power of large technology companies.</p>
<p style="text-align: justify;" dir="ltr">While it is evident the Indian competition landscape will benefit from revisiting the existing law and policy framework to reign in Big technology companies, we argue that the change in Whatsapp’s privacy policy in 2021 can be held anti-competitive using legal provisions as they presently stand. Therefore, in this issue brief, we largely limit ourselves to evaluating the legality of Whatsapp’s privacy policy within the confines of the present legal system. </p>
<p style="text-align: justify;" dir="ltr">First, we dive into an articulation of the present abuse of dominance framework in Indian Competition Law. Second, we analyze whether there was abuse of dominance-bearing in mind an economic analysis of Whatsapp’s role in the relevant market by using tests laid out in previous rulings of the CCI</p>
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<p style="text-align: justify;" dir="ltr">The framework for determining abuse of dominance as per The Competition Act is based on three factors:</p>
<p style="text-align: justify;" dir="ltr">1. Determination of relevant market</p>
<p style="text-align: justify;" dir="ltr">2. Determination of dominant position</p>
<p style="text-align: justify;" dir="ltr">3. Abuse of the dominant position</p>
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<p style="text-align: justify;" dir="ltr">In two previous orders in 2016 and 2020, CCI has held that Whatsapp is dominant in its relevant market based on several factors which we explore. These include:</p>
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<p style="text-align: justify;" dir="ltr">Advantage in user base, usage and reach,</p>
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<p style="text-align: justify;" dir="ltr">Barriers to entry for other competitors</p>
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<p style="text-align: justify;" dir="ltr">Power of acquisition over competitors.</p>
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<p style="text-align: justify;" dir="ltr">However, in both orders, CCI held that Whatsapp did not abuse its dominance by arguing that the practices in question allowed for user choice. We critique these judgments for not reflecting the market structures and exploitative practices of large technology companies. We also argue that even if we use the test of user choice laid down by the CCI in its previous orders concerning Whatsapp and Facebook, the changes made to the privacy policy in 2021 did abuse dominance,and should be held guilty of violating competition law standards.</p>
<p style="text-align: justify;" dir="ltr">Our analysis revolves around examining the explicit and implicit standards of user choice laid out by the CCI in its 2016 and 2020 judgements as the standard for evaluating fairness in an Abuse of Dominance claim.We demonstrate how the 2021 changes failed to meet these standards. </p>
<p style="text-align: justify;" dir="ltr">Finally, we conclude by noting that the present case offers a crucial opportunity for India to take a giant step forward in its regulation of big tech companies and harmonise its rulings with regulatory developments around the world.</p>
<p style="text-align: justify;" dir="ltr">The full issue brief can be found <a href="https://cis-india.org/internet-governance/whatsapp-privacy-policy-2021-issue-brief-competition-law">here</a></p>
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For more details visit <a href='http://editors.cis-india.org/internet-governance/blog/the-competition-law-case-against-whatsapp2019s-2021-privacy-policy-alteration'>http://editors.cis-india.org/internet-governance/blog/the-competition-law-case-against-whatsapp2019s-2021-privacy-policy-alteration</a>
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No publisherAman Nair and Arindrajit BasuConsumer RightsDigital EconomyData ProtectionFacebookCompetitionWhatsAppCompetition Law2021-03-24T16:12:09ZBlog EntryCCI allowed to probe Ericsson: FAQs on Ericsson’s disputes with Micromax and Intex
http://editors.cis-india.org/a2k/blogs/the-quint-nehaa-chaudhari-april-30-2016-cci-allowed-to-probe-ericsson
<b>The blog post is an analysis of the recent decision of the Delhi High Court, clarifying that the Competition Commission of India could investigate Ericsson for a violation of competition law. A shorter version of this blog post was published in the Quint on April 30, 2016.</b>
<div>Read the original article published by <a class="external-link" href="http://www.thequint.com/technology/2016/04/29/all-you-want-to-know-about-the-ericsson-micromax-patent-dispute-intex-intellectual-property-rights-make-in-india">Quint</a> on April 30 here.</div>
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<p style="text-align: justify; ">The mobile phone is the <a href="http://cis-india.org/a2k/blogs/Standard-Essential-Patents-on-Low-Cost-Mobile-Phones-in-India-A-Case-to-Strengthen-Competition-Regulation.pdf"><span>sole access point to the internet</span></a> for about half of India’s population. It has an important role to play in India’s development story, one that is amplified given the central government’s <a href="http://www.digitalindia.gov.in/content/information-all"><span>focus</span></a> on <a href="http://www.digitalindia.gov.in/content/e-governance-%E2%80%93-reforming-government-through-technology"><span>leveraging the internet</span></a> for better <a href="http://www.digitalindia.gov.in/content/ekranti-electronic-delivery-services"><span>governance</span></a>. The government has recognized this importance, evidenced through <a href="http://www.digitalindia.gov.in/content/electronics-manufacturing"><span>electronics manufacturing incentives</span></a> and, a stated commitment to ensure ‘<a href="http://www.digitalindia.gov.in/content/universal-access-mobile-connectivity"><span>universal access to mobile connectivity’</span></a>. Homegrown brands, including Micromax and Intex, with their affordable, low-cost mobile phones, play an important role in this development story.</p>
<p style="text-align: justify; ">In March, 2013, the Swedish multinational, Ericsson, sued Micromax for patent infringement, setting in motion a <a href="http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india"><span>series of events</span></a>, with the potential to disturb India’s mobile phone dream. Then, last month, the Delhi High Court (the Court) <a href="http://lobis.nic.in/ddir/dhc/VIB/judgement/30-03-2016/VIB30032016CW4642014.pdf"><span>recognized</span></a> the authority of the market regulator - the Competition Commission of India (CCI) - to probe Ericsson for its allegedly anticompetitive conduct.</p>
<p style="text-align: justify; "><strong>Why did Ericsson sue Micromax?</strong></p>
<p style="text-align: justify; ">Ericsson claims that Micromax’s mobile phones infringe its standard essential patents (SEPs) on mobile phone technologies, including 3G and EDGE.</p>
<p style="text-align: justify; "><strong>How are some patents identified as SEPs?</strong></p>
<p style="text-align: justify; ">International Standard Setting Organizations (SSOs) – such as <a href="http://www.etsi.org/"><span>ETSI</span></a> or <a href="https://www.ieee.org/index.html"><span>IEEE</span></a> - recognize international standards. 3G and Wi-Fi are examples of such internationally recognized standards.</p>
<p style="text-align: justify; ">According to the <a href="http://www.etsi.org/standards/how-does-etsi-make-standards"><span>SSOs</span></a>, the determination of standards depends on consensus, driven by their <a href="http://www.etsi.org/membership"><span>members</span></a>. After a standard is determined, SEP owners (including Ericsson) <strong><span>voluntarily disclose</span></strong> which of their patents are <strong><i>essential</i></strong> to the determined standard, and, undertake to license these on fair, reasonable and non-discriminatory (FRAND) terms, to any willing licensee.</p>
<p style="text-align: justify; "><strong>Does this give rise to legal issues?</strong></p>
<p style="text-align: justify; ">This process results in a variety of (<a href="http://editors.cis-india.org/a2k/blogs/well-documented"><span>well-documented</span></a>) legal questions, many of which have been raised in India’s SEP litigation, and have been alluded to by the Court in the present judgment. The Court has recognized the potential for SEPs to create dominant positions for their owners, noting that “any technology accepted as a standard would have to be <strong><span>mandatorily</span></strong> <strong><span>followed </span></strong>[emphasis, mine] by all enterprises in the particular industry.”</p>
<p style="text-align: justify; ">Some other legal issues around SEPs include the enforceability of FRAND commitments; determining what would constitute ‘fair’, ‘reasonable’ and, ‘non-discriminatory’; the possibility of non/incomplete disclosure by patent owners; and, a refusal by licensees to negotiate FRAND terms in good faith. A related issue that has received comparatively less attention is the essentiality of peripheral or, non standard but essential patents, where there is no obligation to license on FRAND terms.</p>
<p style="text-align: justify; "><strong>Have there been other SEP infringement suits filed in India?</strong></p>
<p style="text-align: justify; ">Yes. Besides Micromax, Ericsson has also <a href="http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india"><span>sued other</span></a> low-cost mobile phone sellers/manufacturers, homegrown and otherwise, for patent infringement. These include Intex, Lava, Gionee, Xia and iBall. In addition, Vringo has also sued ZTE and Asus, separately. [In this article, we will limit ourselves to a discussion on Ericsson’s suits against Micromax and Intex.]</p>
<p style="text-align: justify; "><strong>What did Micromax and Intex do after being sued by Ericsson?</strong></p>
<p style="text-align: justify; ">Ericsson’s suits were followed by deliberations between the parties (Ericsson and Micromax, and, Ericsson and Intex, independently) and some interim orders by the Court. This litigation is ongoing, and final orders are awaited.</p>
<p style="text-align: justify; ">Meanwhile, both Micromax and Intex have pursued a series of other remedies. Intex has filed applications for the revocation of Ericsson’s patents. In addition, Micromax and Intex have each filed separate complaints under India’s Competition Act, 2002 before the CCI, alleging that Ericsson had abused its dominant position. This is a punishable offence under Indian competition law.</p>
<p style="text-align: justify; ">Micromax and Intex have both claimed that Ericsson’s royalty rates were excessive. In addition, Micromax has objected to Ericsson’s use of the threat of injunctions and custom seizures, and, has also claimed that Ericsson’s conduct results in a denial of market access for Indian handset manufacturers. Intex has alleged, <i>inter alia, </i>that it was forced into signing an onerous non disclosure agreement by Ericsson; and, that it was forced to negotiate licences without a complete disclosure of its patents by Ericsson.</p>
<p style="text-align: justify; ">The CCI, finding there to be a <i>prima facie</i> case in each of the above complaints, ordered the Director General to undertake an investigation into the allegations made by both – Micromax and Intex. These orders were challenged by Ericsson in the Court.</p>
<p style="text-align: justify; "><strong>On what grounds did Ericsson challenge the CCI’s orders?</strong></p>
<p style="text-align: justify; ">Briefly, Ericsson argued-</p>
<p style="text-align: justify; ">(a) that the issue was one of patent law, which barred the applicability of competition law;</p>
<p style="text-align: justify; ">(b) that it was not an ‘enterprise’ under the Competition Act, 2002, and, that the CCI was empowered to check anticompetitive conduct only of ‘enterprises’;</p>
<p style="text-align: justify; ">(c) that its conduct was not anticompetitive since it was only exercising its rights to enforce its patents;</p>
<p style="text-align: justify; ">(d) that since the disputes between the parties were already being heard in other proceedings before the Court, the CCI could not adjudicate them; and,</p>
<p style="text-align: justify; ">(e) that Intex and Micromax were barred from making such allegations. Ericsson opined that since they had challenged its ownership of the SEPs, through revocation of petition applications (filed by Intex), and a denial of infringement claims (by Micromax), they could not now present a complaint premised on it being the owner of those same SEPs.</p>
<p style="text-align: justify; "><strong>What did the Court hold?</strong></p>
<p style="text-align: justify; ">Rejecting Ericsson’s arguments, the Court held that the CCI <strong><span>did</span></strong> [emphasis, mine] have the jurisdiction to examine if Ericsson’s conduct was anticompetitive, finding it to be an ‘enterprise’ under the Competition Act, 2002. However, the Court was clear that the CCI’s actions could be subject to judicial review by the High Court. It also found that the mere applicability of the Patents Act, 1970, did not bar the applicability of competition law, since the legislations covered distinct fields and served different purposes. Further, it opined that Micromax and Intex were free to explore alternative remedies; neither this pursuit, nor, the pendency of disputes on similar issues before the Court, was a bar to the CCI’s jurisdiction.</p>
<p style="text-align: justify; ">Interestingly, while not adjudicating the issue of Ericsson’s abuse of dominance in this particular case, Justice Bakhru, citing its conduct as presented by the other parties said that in some cases, “such conduct, if it is found, was directed in pressuring an implementer to accept non-FRAND terms, would amount to an abuse of dominance.”</p>
<p style="text-align: justify; "><strong>What does the judgment mean for India’s homegrown brands?</strong></p>
<p style="text-align: justify; ">The judgment is a boost for India’s home grown manufacturers in their battle against global patent holders. However, while it certainly validates the role and powers of India’s young market regulator, it will no doubt be appealed. One also expects multiple appeals over the CCI’s findings in the present and, future similar cases.</p>
<p style="text-align: justify; ">It is impossible to predict the outcome of legal proceedings in SEP litigation. Accordingly, Micromax, Intex (and others) would do well to augment their own patent portfolios (either by filing their own patents, or, by acquiring those of other companies). This may create a more level playing field, opening up alternate channels of negotiation, including, cross-licensing. They may also seek access to Ericsson’s SEPs under the compulsory licensing mechanism in India’s patent law.</p>
<p style="text-align: justify; "><strong>What does the government have to say?</strong></p>
<p style="text-align: justify; ">The Department of Industrial Policy and Promotion has recently released a <a href="http://dipp.nic.in/english/Discuss_paper/standardEssentialPaper_01March2016.pdf"><span>discussion paper</span></a> on these issues, inviting <a href="http://cis-india.org/a2k/blogs/summary-of-cis-comments-to-dipp2019s-discussion-paper-on-seps-and-their-availability-on-frand-terms"><span>comments</span></a> from <a href="http://cis-india.org/a2k/blogs/responses-to-the-dipps-discussion-paper-on-seps-and-their-availability-on-frand-terms"><span>stakeholders</span></a>. It would be unsurprising if the government intends to regulate this space, given the strong implications for not just its flagship Make in India and Digital India programs, but also its foreign policy narrative on protecting IPRs and fostering innovation. Immediate welcome steps from the government would be a final word on the <a href="http://dipp.nic.in/English/Schemes/Intellectual_Property_Rights/IPR_Policy_24December2014.pdf"><span>National IPR Policy</span></a>, and, the adoption of the<a href="http://www.mca.gov.in/Ministry/pdf/Revised_Draft_National_Competition_Policy_2011_17nov2011.pdf"><span> National Competition Policy</span></a>, awaited since 2014 and 2011, respectively.</p>
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For more details visit <a href='http://editors.cis-india.org/a2k/blogs/the-quint-nehaa-chaudhari-april-30-2016-cci-allowed-to-probe-ericsson'>http://editors.cis-india.org/a2k/blogs/the-quint-nehaa-chaudhari-april-30-2016-cci-allowed-to-probe-ericsson</a>
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No publishernehaaAccess to KnowledgePervasive TechnologiesIntellectual Property RightsCompetition LawPatents2016-05-01T13:46:52ZBlog EntryStandard Essential Patents on Low-Cost Mobile Phones in India: A Case to Strengthen Competition Regulation?
http://editors.cis-india.org/a2k/blogs/the-socio-legal-review-nehaa-chaudhari-standard-essential-patent-on-low-cost-mobile-phones-in-india
<b>The realization of the promise of the sub hundred dollar mobile device as a facilitator of access to knowledge is contingent inter alia on its availability in the market place. In turn, the market availability of the sub hundred dollar mobile device is influenced by the existence of an enabling environment for producers to produce, and consumers to consume. From a regulatory perspective, the enabling environment itself is a function of existing laws and policies, and the ‘developmental effects’ of certain laws and policies (Saraswati, 2012).</b>
<p style="text-align: justify; ">This article seeks to examine one such legal and policy lever and the role of a regulator in the development of an enabling environment for access to sub hundred dollar mobile devices. This paper is founded on four assumptions: first, that access to sub hundred dollar mobile devices is influenced by their price; second, that the question of access necessitates conversation between the intellectual property regime and several other actors, sites and tools; third, that one of the fundamental goals of regulatory reform is the creation of a ‘stable, open and future- proof environment’ (Guermazi and Satola, 2005) that encourages access to these devices; and fourth, that there exist public law implications of intellectual property that justify the involvement of State actors and regulators in matters that may arise out of private transactions.</p>
<p style="text-align: justify; ">This article will examine whether there is a role to be played by competition law in this narrative of innovation, intellectual property and access to sub hundred dollar mobile devices. In light of increasing litigation around standard essential patents, and the inability of FRAND and International Standard Setting Organizations to find a comprehensive solution, this paper will question the efficacy of competition law as an ex post solution to a problem that might be better addressed by ex ante regulation from a specialized body.</p>
<p style="text-align: justify; ">In an attempt to address these questions, this article will examine the role of the Competition Commission of India and the Indian Judiciary. Orders of the Competition Commission will be studied from its inception till March, 2015, in order to draw conclusions about the role that the Commission identifies for itself and the nature of disputes it adjudicates. This article will also examine the role of similarly placed institutions in the United States of America as well as some member states of the European Union.</p>
<p style="text-align: justify; ">It will be argued that while Competition Law might address some of the issues arising out of litigation around standard essential patents, and might be a tool to increase access to sub hundred dollar mobile devices, its efficacy as a long term solution in light of its nature as an ex post solution, is questionable. Consequently, it might be prudent to have a conversation leaning towards exante regulation of the market place by a specialized regulator.</p>
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<p>The paper was published by <a class="external-link" href="http://www.sociolegalreview.com/standard-essential-patents-on-low-cost-mobile-phones-in-india-a-case-to-strengthen-competition-regultion/">Socio Legal Review</a> (National Law School of India University). Download the PDF <a href="http://editors.cis-india.org/a2k/blogs/Standard-Essential-Patents-on-Low-Cost-Mobile-Phones-in-India-A-Case-to-Strengthen-Competition-Regulation.pdf" class="internal-link">here</a>.</p>
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For more details visit <a href='http://editors.cis-india.org/a2k/blogs/the-socio-legal-review-nehaa-chaudhari-standard-essential-patent-on-low-cost-mobile-phones-in-india'>http://editors.cis-india.org/a2k/blogs/the-socio-legal-review-nehaa-chaudhari-standard-essential-patent-on-low-cost-mobile-phones-in-india</a>
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No publishernehaaPatentsCompetition LawCompetitionAccess to Knowledge2016-04-24T04:42:52ZBlog Entry