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TMI Blog2022 (9) TMI 1612X X X X Extracts X X X X X X X X Extracts X X X X ..... other Facebook companies. The Commission ultimately came to conclude that the sharing of data by WhatsApp with other Facebook companies raised tangible questions which warranted investigation under the Act. Scope of the investigation is thus apparently not merely limited to the operations and conduct of business by WhatsApp and Facebook Inc. alone but also extending and stretching to the subsidiaries and other companies incorporated by the latter. The petitioner cannot possibly dispute the fact that it is a sister concern of Facebook Inc. present in India. In view of the above, the impugned order of the Commission clubbing the information received in respect of its activities with the Suo Motu Case was not only justified but also imperative for the purposes of the investigation. The Court also deems it apposite to observe that Cadila [ 2018 (9) TMI 844 - DELHI HIGH COURT ] has lucidly explained the scope of the expression subject matter as occurring in Section 26(1) as not being restricted merely to the allegations levelled but other allied and unenumerated aspects and even to include third parties. It would be pertinent to recall that Cadila was a case where a party was joined by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter with Suo Motu Case No. 01 of 2021. No separate order or further direction is required to be passed on the instant Information and the same shall abide by the decision of the Commission in Suo Motu Case No. 01 of 2021. It is clarified that the scope of the Order dated 24.03.2021 passed under Section 26(1) of the Act, in Suo Motu Case No. 01 of 2021, remains unaltered by virtue of the clubbing of the present matter with Suo Motu Case No. 01 of 2021. 3. Consequent to the aforesaid direction of the Commission, the Director General had issued a notice on 26 October 2021, calling upon the petitioner here to submit requisite information. The Suo Motu Case came to be registered by the Commission against WhatsApp LLC and Facebook, Inc. (now known as Meta Platforms, Inc .). By an order of 24 March 2021, the Commission taking note of the issues which arose from the updated privacy policy and terms of service for WhatsApp users had proceeded to form the opinion that an investigation was merited. That order was challenged by WhatsApp LLC and Facebook, Inc. by way of writ petitions preferred before this Court being W.P.(C) 4378/2021 W.P.(C) 4407/2021 which came to be dismissed on 22 April 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, does not deem it fit to scuttle the investigation at a nascent stage and defers to the wisdom of the DG and the CCI, and rejects the Impleadment Application. However, the Applicant is granted the liberty to take all such steps as required by it, in accordance with law, to impugn the CCI order. 5. It is in the aforesaid backdrop that the instant writ petition has come to be preferred. Before proceeding further to record the submissions which were addressed on this petition, it would be pertinent to note that the petitioner asserts to be a private limited company whose current role is explained to be limited to providing sales and marketing services relating to advertising in India as well as other support services to Meta Platforms, Inc. As was noted in the introductory parts of this judgment, the Commission, while passing the direction for clubbing of the information which had been received by it pertaining to the present petitioner, had noted that the allegations were substantially the same and related to the same subject matter which formed part of the ongoing investigation which had commenced pursuant to the directions issued on the Suo Motu Case. 6. In view of the above, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... users and not based on a voluntary and specific user consent. It was in the aforesaid backdrop that the Commission proceeded to frame directions for the Director General to commence an investigation. 9. Mr. Tripathi, learned Senior Counsel appearing in support of the writ petition, principally contended that a reading of Section 26(1) of the Act would establish that the framing of a direction by the Commission to cause an investigation to be made must be premised on it coming to the conclusion that a prima facie case exists and which warrants an investigation. According to Mr. Tripathi, a reading of the impugned order would establish that no such satisfaction had either been recorded or arrived at by the Commission. Learned Senior Counsel contends that before framing of directions for an investigation being undertaken by the Director General, it was incumbent upon the Commission to record its prima facie conclusion that the activities of the petitioner warranted investigation and examination under the Act. Mr. Tripathi argued that the instant writ petition has been preferred by the petitioner based on the liberty that was accorded to it by the Division Bench of the Court which had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the settled canons of law, we would adopt even in this case. In the backdrop of these determinants, we may refer to the provisions of the Act. Section 26, under its different sub-sections, requires the Commission to issue various directions, take decisions and pass orders, some of which are even appealable before the Tribunal. Even if it is a direction under any of the provisions and not a decision, conclusion or order passed on merits by the Commission, it is expected that the same would be supported by some reasoning. At the stage of forming a prima facie view, as required under Section 26(1) of the Act, the Commission may not really record detailed reasons, but must express its mind in no uncertain terms that it is of the view that prima facie case exists, requiring issuance of direction for investigation to the Director General. Such view should be recorded with reference to the information furnished to the Commission. Such opinion should be formed on the basis of the records, including the information furnished and reference made to the Commission under the various provisions of the Act, as aforereferred. However, other decisions and orders, which are not directions simp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been caused to the petitioner, the challenge as raised in the impugned writ petition, is liable to be rejected. 14. Learned counsel also placed reliance upon the judgment rendered by a Division Bench of the Court in Cadila Healthcare Limited and Anr. v. Competition Commission of India and Ors. 2018 SCC OnLine Del 11229 It becomes pertinent to note that the aforesaid decision dealt with the validity of a direction issued by the Director General impleading Cadila Healthcare in an ongoing investigation even though it had not been joined as a party by the Commission in the directions which were issued by it under Section 26(1) of the Act. While negating the challenge as raised to the directions of the Director General in that matter, the Division Bench made the following pertinent observations:- 43. Cadila's argument, that in Excel Crop Care the issue was inclusion of more than one instance or incident within the ambit of investigation (given that the complaint was in respect of one tender only) is distinguishable, is in this court's opinion, insubstantial and needs to be rejected. Its reliance on Grasim Industries, is no longer apt. At the stage when the CCI takes cognizance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la, in the opinion of this court, is precluded from stating that a specific order authorizing transactions by it, was a necessary condition for DG's inquiry into its conduct. This court is further reinforced in its conclusion in this regard by the express terms of the statute : Section 26(1) talks of action by CCI directing the DG to inquire into the matter . At this stage, there is no individual; the scope of inquiry is the tendency of market behaviour, of the kind frowned upon in Sections 3 and 4. The stage at which it CCI can call upon parties to react is when it receives a report from DG stating there is no material calling for action, it has to issue notice to the concerned parties (i.e. the complainant) before it proceeds to close the case (Sections 26(5) and (6)). On the other hand, if the DG's report recommends otherwise, it is obliged to proceed and investigate further (Sections 26(7) and (8)). Again Section 27 talks of different parties [ enterprise or association of enterprises or person or association of persons - per Section 27(a)]. Likewise, the steps outlined in Section 26 are amplified in the procedure mandated by Regulation 20 and 21, which requires partici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for respective parties, the Court deems it apposite to extract the following passages from the decision of the Supreme Court in Steel Authority of India where the scope and ambit of Section 26(1) of the Act was lucidly explained in the following terms:- 38. In contradistinction, the direction under Section 26(1) after formation of a prima facie opinion is a direction simpliciter to cause an investigation into the matter. Issuance of such a direction, at the face of it, is an administrative direction to one of its own wings departmentally and is without entering upon any adjudicatory process. It does not effectively determine any right or obligation of the parties to the lis. Closure of the case causes determination of rights and affects a party i.e. the informant; resultantly, the said party has a right to appeal against such closure of case under Section 26(2) of the Act. On the other hand, mere direction for investigation to one of the wings of the Commission is akin to a departmental proceeding which does not entail civil consequences for any person, particularly, in light of the strict confidentiality that is expected to be maintained by the Commission in terms of Section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Appeals preferred by the WhatsApp LLC and Facebook, Inc. while elucidating the scope of Section 26(1) had also pertinently observed that the said provision does not contemplate the Commission discharging an adjudicatory function. The Court had held that the function as discharged by the Commission under Section 26(1) is essentially administrative in character and in the nature of a preparatory measure which merely requires the Director General to commence an investigation. Proceeding further to explain the scope of a prima facie case, the Division Bench while following the principles enunciated in Steel Authority of India observed that it would only require the Commission taking into account all material present without entering into any adjudicatory or determinative process. It becomes pertinent to note that the Division Bench while dealing with the validity of the order dated 24 March 2021 had observed that the Commission had assigned sufficient reasons for arriving at a conclusion that a prima facie case of violation of Section 4 of the Act was made out. 17. Having noticed the essential facts and the principles of law which would govern, the Court at the outset notes that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velled but other allied and unenumerated aspects and even to include third parties. It would be pertinent to recall that Cadila was a case where a party was joined by the Director General during the investigation even though no directions had been framed against it by the Commission in its order made under Section 26(1). While affirming that action, the Court had specifically rejected the contention that the joining of Cadila in the proceedings was liable to be preceded by the Commission applying its mind specifically to the role discharged by it. Here too, the presence of the petitioner in the investigation would clearly be necessary for the purposes of examining the issues which stand noticed in the original order of the Commission. 20. The Court notes that the order of the Commission 24 March 2021 has spelt out in some detail the issues which merit investigation. Those cover the entire gamut of questions which emanate from the sharing of user data between WhatsApp, Facebook and its other companies which would necessarily and obviously include the petitioner here. The various issues which arise out of the terms of the updated Privacy Policy of WhatsApp were duly explored and exam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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