By Nicole D. Prysby, J.D.
India’s Competition Commission found that Facebook did not violate the Competition Act by enabling automatic installation of the WhatsApp Payments App in the WhatsApp messaging app.
The Competition Commission of India (CCI) dismissed a case brought under the Competition Act, accusing Facebook and WhatsApp Inc. of anticompetitive behavior by bundling a payment app (WhatsApp Pay) with the popular messaging app, WhatsApp. WhatsApp (acquired by Facebook in 2014) enjoys a dominant position in the internet based instant messaging app market. When a user downloads WhatsApp, the digital payment app WhatsApp Pay is automatically downloaded as well. The CCI found that the behavior did not violation the Competition Act, because the mere existence of an app on a smartphone does not convert into usage. Because users are not blocked from using another digital payment app, the mere integration of WhatsApp and WhatsApp Pay does not contravene the Act.
Allegations. Facebook acquired the messaging app WhatsApp in 2014 and bundled it with a payment option (WhatsApp Pay). WhatsApp enjoys a dominant position in the internet based instant messaging app market, having a pre-existing user base of more than 400 million monthly active users in India. It was alleged that the bundling used the dominance of WhatsApp in the instant messaging market to penetrate into the digital payments app market. In addition, by enabling automatic installation of WhatsApp Payments App in the WhatsApp messaging app, WhatsApp was alleged to be taking advantage of its vast userbase to popularize its newly launched WhatsApp Pay app. United Payments Interface (UPI), launched in India in 2016, is an instant real-time payment system facilitating inter-bank transactions on a mobile platform. Users are not bound to using the app of their own bank, but may use any third-party app to facilitate payments through UPI.
The claimed relevant markets were the market for internet-based messaging applications through smartphones in India and the market for UPI-enabled digital payment applications in India. These are two separate markets, with a sufficient consumer demand for use of these apps separately and independently.
Companies: Facebook; WhatsApp Inc.
MainStory: TopStory Antitrust GCNNews
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