Assessment of Competition Policies in Harshita Chawla vs WhatsApp and Facebook
The Indian antitrust authority ruled in Harshita Chawla vs WhatsApp and Facebook that integrating the company's payments program, WhatsApp Pay (WPay), within its messaging app is not anti-competitive. The Competition Commission of India (CCI) concluded that this integration does not qualify as "tying in" because it lacks pressure on users, aligning digital marketplaces with physical businesses. However, this decision overlooks the complexity of digital markets and the potential for market foreclosure.
WhatsApp Pay's launch aimed to enter India's digital payments market, building on the success of the Unified Payments Interface (UPI). Users would transact money over WhatsApp, providing a convenient in-chat feature. Despite concerns from petitioners regarding compliance with data localization regulations, the National Payments Corporation of India (NPCI) confirmed WA Pay's compliance, allowing ICICI Bank to go live with the service. Despite this, Harshita Chawla filed a petition under Section 19(1)(a) of the Competition Act, alleging violations by Facebook and WhatsApp.
The CCI dismissed market foreclosure concerns, citing competitors' multinational backing. However, this disregards the EU's stance, which considers even minor disadvantages to competitors. Tying and bundling practices, especially by dominant firms, can hinder competition. WhatsApp's vast user base and access to Facebook's data raise concerns about market dominance. Although the CCI recognized network effects and convenience, it failed to address data-related concerns raised by the Informant, overlooking potential anticompetitive conduct.
While competition is beneficial, its source matters. In this case, competition from a large conglomerate poses risks of market dominance and access to sensitive data. Indian competition regulation needs alignment with global standards to address these concerns effectively. The CCI has demonstrated a readiness to recognize and value the impact of convenience and network effects. Therefore, to avert actual harm, it is imperative that the CCI identifies which company actions or acquisitions have the potential to impair competition and regulates them proactively. Furthermore, the CCI ignored the informant's data-related concerns, claiming there were insufficient specific complaints. While more competition is typically good for customers, it is important to examine the origins and characteristics of this rivalry. Given its access to sensitive consumer data and high payment volumes, which could make it a single point of failure, competition from a single, sizable company may not always be beneficial in this situation.