Lack of choice for users to ‘opt-out’
This case is very similar to the investigation and order by German Cartel Office (‘GCO’) against Facebook for exploitative business terms with respect to data collection and lack of choice to users. In that case also, one of the GCO’s main contention to hold Facebook liable was the fact that users were consenting to the terms and conditions of Facebook to essentially conclude the contract, which translates to the situation where a user is not provided with a choice to ‘opt-out’. Facebook was mandated to provide voluntary consent to users, which meant that the usage of their services should not be subjected to their consent to share data.
The Hon’ble Supreme Court in Central Inland Water Transport Corporation Ltd. & Anr. vs Brojo Nath Ganguly & Anr [1986 AIR 1571] emphasised the requirement of ‘reasonableness’ in the terms of the contract and discussed the doctrine of ‘unconscionability’ where unequal bargaining power is a major factor in the imposition of unfair terms in the contract. The Hon’ble Supreme Court had also observed that if such a weaker party has no meaningful choice but to give his assent to a contract (or to accept a set of rules as part of the contract), however unfair, unreasonable and unconscionable they may be, the courts will strike down such unfair and unreasonable contract. This reasoning by the Supreme Court essentially translates to the test of ‘user-choice’ as applied by CCI in competition law cases to determine abuse of dominant cases with respect to the imposition of unfair terms and conditions on users.
Jurisdiction of CCI
Presently at the outset when India lacks a data protection authority, it can be observed that CCI has simply taken advantage of such an absence to commit jurisdictional overreach without any immediate ramifications. Such an intention to step into the shoes of the data protection regulator was evident from CCI’s response to Whatsapp’s preliminary objection of challenging CCI’s jurisdiction by relying on the landmark case of the Hon’ble Supreme Court in Competition Commission of India v. Bharti Airtel Limited and Ors. [(2019) 2 SCC 521]. The Hon’ble Supreme Court for the purposes of maintaining comity between regulators had stated that CCI will essentially have a ‘follow-on’ jurisdiction to a sectoral regulator who will first exercise primary jurisdiction to address technical issues related to a case.
But, in the present case, CCI had refuted the preliminary objection by simply stating that there is no other sectoral regulator that is actually seized of the matter. Nevertheless, in a situation where the proposed PDP Bill is enacted by the Central Government, such a course of action by CCI can be challenged before the courts for lack of jurisdiction. Hence this could set a bad precedent for upcoming cases in the same area of interface between data protection and competition law without encouraging consultation or cooperation between regulators to tackle such issues and adding to existing turf wars faced by CCI.
At least in situations where the privacy policies are framed in such a way that the consent of users is dependent on the continuation of usage of that service, then it can undoubtedly be classified as improper/involuntary consent. As previously mentioned, the ‘test of user-choice’ is a valid course of action for CCI against dominant entities in such “take it or leave it” privacy policies to decide a prima facie case of exploitative conduct with respect to data collection.
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Very well put, amazing work.
The right article at the right time. Thank you.
Thank you Stephen