Facebook is reportedly being investigated by India over WhatsApp Pay
Facebook-owned WhatsApp has been trying to enter the payments space in India for quite a while now. We first found signs of a new payments feature in the app all the way back in 2017 and the feature briefly rolled out to a small number of users back in 2018. However, due to data localization issues with the National Payments Corporation of India (NPCI), a wider rollout was pushed back indefinitely. The company has since been in constant talks with the government, with Facebook’s Mark Zuckerberg even assuring that the payments service will be launched in India soon. Despite Zuckerberg’s assurances, late last year the Reserve Bank of India directed the Supreme Court that WhatsApp Pay was still not compliant with India’s data localization norms and asked the NPCI to stop its rollout.
Earlier this year, WhatsApp finally managed to cross all the hurdles and received regulatory approval to launch its payments platform in the country. In preparation for the home stretch, the company planned to launch a pilot run to extend the payments feature to 10 million users, with a nation-wide rollout scheduled for later this year. But as a recent report from Reuters points out, WhatsApp now has another major hurdle to overcome before it can reach the finish line.
According to three people familiar with the matter, the Competition Commission of India (CCI) is currently reviewing a complaint filed in mid-March which alleges that WhatsApp is abusing its market position in the country by offering the digital payments facility within its messaging app that has a user base of around 400 million users in the country. This is expected to give WhatsApp a significant edge over the competition, like Google Pay and PayTM, which the complainant deems unfair. The CCI can now order its investigations arm to conduct a wider probe into the allegations or throw out the case if it finds no merit in it.
One of the three sources further revealed that, “The case is in initial stages…senior members of CCI are reviewing it but a final decision hasn’t been reached.” The second source added that due to the fact that WhatsApp’s messenger service and its payments feature are bundled together, it could harm competition and violate the country’s antitrust laws. It’s also worth noting that while the antitrust case has been filed against both Facebook and WhatsApp, the complainant has urged the CCI to investigate only WhatsApp. We currently have no official information from WhatsApp, Facebook, or the CCI regarding the matter.
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