WhatsApp: Antitrust allegations against Facebook WhatsApp in India – Latest news

India's antitrust regulator is investigating allegations that Facebook's WhatsApp is abusing its dominant position by offering payment services to its vast messaging app user base in the country, three sources told Reuters on Friday.

The Indian Competition Commission (CCI) is reviewing a complaint filed in mid-March alleging that WhatsApp was bundling its digital payment service within its messaging app, allowing it to abuse its market position and penetrate the India's burgeoning digital payments market, sources said.

WhatsApp and Facebook did not immediately respond to repeated requests for comment. The JRC did not respond either.

Two of the sources told Reuters that the plaintiff in the case was an attorney, but declined to disclose the person's identity. Reuters could not independently determine who presented the case.

The complaint, which had not been previously reported, comes at a critical time for WhatsApp, which is aggressively working to fully launch its payment platform in India, where it has been testing beta with 1 million users since 2018.

The lack of regulatory authorizations has meant that WhatsApp has had trouble offering the service to its around 400 million users in India, its largest market worldwide.

The ICC may order its investigative arm to conduct a more extensive investigation of the allegations, or dismiss the case if it finds no merit in it.

"The case is in the early stages … CCI core members are reviewing it, but no final decision has been reached," said the first of three sources, all of which declined to be identified as details of the case were private.

The antitrust complaint alleges that WhatsApp's large user base meant that it was dominant in the messaging app market, and that the company was forcing its users to introduce its payment feature.

The two products, WhatsApp's messaging service and its payment function, are bundled together, which could harm competition and violate the country's antitrust laws, the second source said, detailing the allegations.

The WhatsApp payment service will allow users to make interbank funds transfers from the messaging application. It will compete with the payment applications of Google Alphabet Inc and Paytm backed by Softbank, which already have tens of millions of users across India.

While the antitrust case has been brought against Facebook and WhatsApp, the plaintiff has urged the watchdog to investigate only WhatsApp, the second source said.

It is possible that WhatsApp may escape further investigation as the scope of any market abuse will become clearer only when the service is fully launched, the source added.

The antitrust complaint is the latest setback for WhatsApp in India.

A group of legal experts from India last month filed a case in the Supreme Court saying WhatsApp should not be allowed to expand its payment service as it was violating data storage rules.

WhatsApp told the court that it will comply with the necessary laws before going ahead, according to a May 13 court order that also asked Indian regulators to present their views on the case.

In April, Facebook said it will spend $ 5.7 billion to buy a 9.99% stake in Reliance Industries of India's digital arm as it seeks to implement services for supermarkets and small businesses by capitalizing on WhatsApp's broad reach.