Relevance: GS II (Polity & Governance) & GS III (Digital Rights) | Source: Supreme Court Proceedings / The Hindu

1. The Core Conflict: Consent or Coercion?

The Supreme Court is hearing a case challenging WhatsApp’s 2021 privacy policy, which mandated data sharing with its parent company, Meta.

• The Judicial View: The Court, led by Justice Surya Kant, termed the “take-it-or-leave-it” policy as effectively coercive.
• The Logic: In a market where WhatsApp is a monopoly, “opting out” is impossible for an Indian citizen (due to the Network Effect). Therefore, obtaining consent under threat of disconnection is a “legal fiction.” The Court even compared unauthorized monetization of data to “theft.”

2. The Regulatory Action (CCI)

• Abuse of Dominance: The Competition Commission of India (CCI) had fined Meta ₹213.14 Crore for abusing its dominant position.
• The Conflict: While the NCLAT upheld the dominance finding, it set aside the CCI’s ban on data sharing, preferring to let the new DPDP Act, 2023 handle the rules. The SC is now reviewing this gap.

3. Data as “Property” & Sovereign Rights

A significant shift in the legal debate is viewing data not just as privacy, but as an Economic Asset.

• Rent-Sharing Concept: If a company profits from a citizen’s data (e.g., rural behavioral trends for ads), the Court asked: Who owns that value?
• The Ultimatum: The SC has directed Meta to provide an undertaking to stop sharing data for ads, warning of strict interim orders if they fail to comply by Feb 9, 2026.

UPSC Value Box

Q. With reference to the digital economy, the term “Network Effect” best refers to:

1. The speed at which data travels through a fiber optic network.
2. A phenomenon where the value of a service increases as the number of users increases, often leading to market dominance.
3. The government’s strategy to connect all Gram Panchayats via broadband.
4. The sharing of user data between parent and subsidiary companies for targeted advertising.

Correct Answer: (2)