WhatsApp’s pay service under regulatory lens
Complaint says the messaging service was using its large user base to penetrate into India’s booming digital payments market
NEWDELHI: The Competition Commission of India (CCI) is looking into allegations that WhatsApp is abusing its dominant position by offering payment services to its vast base of users in the country, sources said. WhatsApp’s payment service will allow users to do inter-bank fund transfers from within the messaging app.
THE TWO PRODUCTS -
WHATSAPP MESSENGER AND ITS PAYMENTS FEATURE - ARE BUNDLED, WHICH COULD HARM COMPETITION, AS PER THE COMPLAINT
NEWDELHI:India’s antitrust watchdog is looking into allegations that Facebook’s WhatsApp is abusing its dominant position by offering payment services to its vast base of messaging app users in the country, three sources told Reuters on Friday.
The Competition Commission of India (CCI) is reviewing a complaint filed in mid-March alleging that WhatsApp was bundling its digital payment facility within its messaging app, allowing it to abuse its market position and penetrate India’s booming digital payments market, the sources said. WhatsApp and Facebook did not immediately respond to repeated requests for comment. The CCI also did not respond.
Two of the sources told Reuters the complainant in the case was a lawyer, but declined to divulge the identity of the person. Reuters could not independently ascertain who filed the case.
The complaint, which has previously not been reported, comes at a critical time for WhatsApp, which is working to launch its payments platform in India, where it has been beta testing it with 1 million users since 2018.
Lack of regulatory clearances have meant WhatsApp has struggled to offer the service to its around 400 million users in India, its biggest 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 merit in it.
“The case is in initial stages .. senior members of CCI are reviewing it but a final decision hasn’t been reached,” said the first of the three sources, all of whom declined to be identified.
The antitrust complaint alleges that WhatsApp’s large user base meant it was dominant in the messaging app market, and the company was forcing its payments feature on to its existing users.
The two products - WhatsApp’s messenger service and its payments feature - are bundled, which could harm competition and violate the country’s antitrust laws, the second source said while detailing the allegations.
WhatsApp’s payment service will allow users to do inter-bank fund transfers from within the app. It will compete with payment apps of Google and Softbankbacked Paytm.
While the antitrust case has been filed against both Facebook and WhatsApp, the complainant has urged the watchdog to investigate only WhatsApp, the second source said. It was possible WhatsApp could escape a wider investigation as the extent of any market abuse will be clearer only when it fully launches the service, the source added.