In a major reprieve for Meta, an Indian tribunal has suspended restrictions that would have barred WhatsApp from sharing user data with its parent company, Meta. The National Company Law Appellate Tribunal (NCLAT) on Thursday delivered a significant victory for Mark Zuckerberg's social media empire in its largest market by users.

The ruling temporarily lifts a five-year ban imposed by India's antitrust regulator, the Competition Commission of India (CCI), which had accused WhatsApp of abusing its market dominance through its 2021 privacy policy. The CCI had found that WhatsApp's "take-it-or-leave-it" privacy update constituted an abuse of Meta's dominant position by forcing users to accept expanded data collection without an opt-out option.

India is a crucial market for Meta and WhatsApp, with over 700 million users in India using WhatsApp each month, according to insights from Sensor Tower. The country's antitrust regulator had determined that Meta was dominant in two key markets in India: over-the-top messaging apps through smartphones, and online display advertising.

The tribunal, led by Justice Ashok Bhushan, expressed concern that the five-year ban could threaten WhatsApp's business model, which provides the messaging service free to users. The court has ordered Meta to deposit about $12.35 million — half of a larger penalty — within two weeks. The case will next be heard on March 17.

Meta's lawyers had argued that India's forthcoming digital privacy law, expected to go into effect later this year, should govern such matters rather than competition rules. The company welcomed the NCLAT's decision, stating that its focus remains on finding a path forward that supports millions of businesses that depend on its platform for growth and innovation, as well as providing high-quality experiences that people expect from WhatsApp.

The dispute began when WhatsApp required users to accept expanded data sharing with Meta's platforms or risk losing access to the messaging service. While European users can opt out of such sharing, Indian users cannot — a distinction that regulators found problematic. The temporary lifting of the ban is a significant win for Meta, allowing WhatsApp to continue sharing user data with its parent company, at least for now.

The implications of this ruling are far-reaching, with potential consequences for the Indian tech industry and user privacy. As India's digital landscape continues to evolve, this decision sets an important precedent for how tech companies can operate in the country. With the forthcoming digital privacy law expected to bring significant changes to the industry, this ruling may be just the beginning of a larger conversation about data sharing and user privacy in India.