India's Supreme Court Challenges Meta Over WhatsApp Privacy Practices and Data Monetization

India's Supreme Court issued a stern warning to Meta on Tuesday, emphasizing that the company cannot compromise the privacy rights of Indian users. The court's remarks came during proceedings where judges scrutinized WhatsApp's data monetization practices and questioned how the platform leverages personal user information.

The case centers on Meta's appeal against a ₹2.13 billion (~$23.6 million) penalty imposed by India's competition regulator related to WhatsApp's controversial 2021 privacy policy update. The judges raised critical concerns about meaningful user consent in a market where WhatsApp functions as the de facto communication standard.

With over 500 million users, India represents WhatsApp's largest global market and a strategic growth region for Meta's advertising ecosystem. The judiciary is examining the commercial implications of metadata generated by the platform and its potential monetization across Meta's advertising and AI infrastructure.

Chief Justice Surya Kant stated that the Supreme Court would prohibit Meta and WhatsApp from sharing "a single piece of information" during the appeal process. He characterized the messaging service as a de facto monopoly, questioning how vulnerable populations—such as street vendors or domestic workers—could reasonably comprehend data usage practices when accepting the privacy policy represents a prerequisite for platform access.

Justice Joymalya Bagchi emphasized the court's interest in examining the commercial value of behavioral data and its application in targeted advertising systems, noting that even anonymized or compartmentalized information carries significant economic value. Government counsel argued that personal data is not merely collected but actively exploited for commercial purposes.

Meta's legal representatives maintained that the platform implements end-to-end encryption, rendering message content inaccessible even to the company itself. They contended that the disputed privacy policy neither diminished user protections nor permitted chat content utilization for advertising purposes.

The controversy originated from a 2021 WhatsApp privacy policy update that mandated Indian users accept expanded data-sharing terms with Meta or discontinue service usage. India's competition watchdog subsequently imposed penalties, determining that the policy constituted an abuse of WhatsApp's dominant market position. The ruling was upheld on appeal before Meta escalated the matter to the Supreme Court. Meta's counsel confirmed the penalty has been paid.

The Supreme Court has adjourned proceedings until February 9, requiring Meta and WhatsApp to provide comprehensive documentation of their data handling practices. Following the competition regulator's recommendation, the court agreed to include the IT ministry as a party, significantly expanding the case's scope.

Meta declined to provide comment on the proceedings.

WhatsApp continues to face intensified regulatory scrutiny regarding data privacy globally. U.S. authorities have reportedly investigated claims questioning the platform's privacy assurances, contributing to broader concerns about encrypted messaging platforms' data handling practices.

In India specifically, WhatsApp is navigating additional regulatory challenges, including recently implemented SIM-binding requirements designed to combat fraud, which may constrain small business adoption of the messaging platform.