Digital payments market: India watchdog reviewing antitrust allegations against WhatsApp

New Delhi: India`s antitrust watchdog is wanting into allegations that Facebook`s WhatsApp is abusing its dominant place by providing cost providers to its huge base of messaging app customers within the nation, three sources informed Reuters on Friday.

The Competition Commission of India (CCI) is reviewing a criticism filed in mid-March alleging that WhatsApp was bundling its digital cost facility inside its messaging app, permitting it to abuse its market place and penetrate India`s booming digital payments market, the sources mentioned.

WhatsApp and Facebook didn’t instantly reply to repeated requests for remark. The CCI additionally didn’t reply. Two of the sources informed Reuters the complainant within the case was a lawyer however declined to reveal the id of the individual. Reuters couldn’t independently verify who filed the case.

The criticism, which has beforehand not been reported, comes at a important time for WhatsApp, which is aggressively working to completely launch its payments platform in India, the place it has been beta testing it with 1 million customers since 2018.

Lack of regulatory clearances has meant WhatsApp has struggled to supply the service to its round 400 million customers in India, its greatest market worldwide. The CCI can order its investigations arm to conduct a wider probe into the allegations or throw out the case if it finds no benefit in it.

“The case is in initial stages .. senior members of CCI are reviewing it but a final decision hasn`t been reached,” mentioned the primary of the three sources, all of whom declined to be recognized because the case particulars had been non-public.

The antitrust criticism alleges that WhatsApp`s giant consumer base meant it was dominant within the messaging app market, and the corporate was forcing its payments characteristic on to its current customers.

The two merchandise – WhatsApp`s messenger service and its payments characteristic – are bundled, which may hurt competitors and violate the nation`s antitrust legal guidelines, the second supply mentioned whereas detailing the allegations.

WhatsApp`s cost service will enable customers to do inter-bank fund transfers from inside the messaging app. It will compete with cost apps of Alphabet Inc`s Google and Softbank-backed Paytm, which have already got tens of hundreds of thousands of customers throughout India.

While the antitrust case has been filed against each Facebook and WhatsApp, the complainant has urged the watchdog to research solely WhatsApp, the second supply mentioned.

It was doable WhatsApp may escape a wider investigation because the extent of any market abuse will probably be clearer solely when it absolutely launches the service, the supply added. The antitrust criticism is the most recent setback for WhatsApp in India.

An Indian authorized think-tank final month filed a case within the Supreme Court saying WhatsApp shouldn’t be allowed to develop its payments service because it was violating information storage guidelines.

WhatsApp informed the courtroom it’ll adjust to obligatory legal guidelines earlier than it strikes forward, based on a May 13 courtroom order that additionally requested Indian regulators to submit its views on the case.

In April, Facebook mentioned it’ll spend $5.7 billion to purchase a 9.99% stake in India`s Reliance Industries` digital arm, because it seems to roll out providers for grocers and small companies by capitalizing on WhatsApp’s in depth attain.

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