CCI Dismisses Predatory Pricing Complaint Against Whatsapp

Published on 08 Jun 2017 by Team

CCI order .. the Commission is of the view that even though ‘WhatsApp’ appears to be dominant in the relevant market, the allegations of predatory pricing have no substance and the opposite party has not contravened any of the provisions of Section 4 of the (Competition) Act.

There is "no substance" in the allegations of predatory pricing made against WhatsApp even though the messaging app is dominant in the relevant Indian market, according to the Competition Commission of India (CCI). WhatsApp Inc was acquired by Facebook in 2014.

Rejecting a complaint, the CCI on Thursday emphasised that there are no significant costs preventing users to switch from one consumer communication application to another.

Among others, it was alleged that WhatsApp is indulging in predatory pricing by not charging any subscription fee from the users since January last year.

To assess the complaint, the fair trade regulator considered 'the market for instant messaging services using consumer communication apps through smartphones in India' as the relevant one.

Section 4 pertains to abuse of dominant position.

According to the watchdog, all consumer communication apps are offered free of cost or at a very low price and are normally characterised by simple user interfaces so that costs of switching to a new app are minimal for consumers. "Furthermore, the expansion of Hike Messenger to nearly 100 million user base within three years of launching their services into the aforesaid market reflects that in this market, there are no significant barriers to entry and consumers appear to be price sensitive," the order said.

Besides, CCI said that allegations of WhatsApp breaching the Information Technology Act, 2000 do not fall within the purview of examination under the provisions of the Competition Act. The complaint was filed by one Rajasthan-based chartered accountant Vinod Kumar Gupta on behalf of the Fight for Transparency Society.

News Source- BloombergQuint

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