含羞草社区

The Uttar Pradesh State Consumer Disputes Redressal Commission (UPSCDRC) recently came to a decision that may reshape consumer jurisprudence in the context of digital services. It held that a consumer complaint was maintainable against the messaging app, WhatsApp, under the Consumer Protection Act, 2019 (act). The UPSCDRC allowed the complaint despite the fact that WhatsApp offers its services to users free of charge. By delivering this decision, the UPSCDRC raises important questions about the interpretation of the term “consideration” in the act for a dynamic digital economy.

Well-known local politician, Amitabh Thakur, filed the consumer complaint due to the disruption of his WhatsApp services for six hours. He maintained that the disruption hindered his work and he sought compensation. However, the District Forum dismissed his complaint. The complainant took the matter to the UPSCDRC, which took a contrary view and ordered the District Forum to admit the complaint and deliver a decision within 90 days in accordance with the act.

The crux of the matter before the tribunals is the interpretation of the definition of a consumer under section 2(7) of the act. This extends the provisions of the legislation to any person who buys any goods or uses any services in exchange for consideration, either paid or promised. The District Forum relied on this definition to reject Thakur’s complaint. It held that the act did not apply to WhatsApp because its products were free of charge.

The UPSCDRC, however, took the opposite view. Although it accepted that no monetary payment was made, the UPSCDRC decided that WhatsApp’s users were indeed providing something of value. In exchange for the services, users provide their data. WhatsApp collects data from users from the moment they sign up for the services it offers. The provider then uses the information for its own commercial purposes. Users have to agree to largely one-sided, non-negotiable agreements.

These agreements allow WhatsApp not only to collect data, but also to be granted a licence authorising the use of personal user data for the purposes of operating and providing their services. Digital platforms such as WhatsApp use these licences to monetise the data they receive by methods including targeted advertisements. By adopting a more extensive interpretation of the term consideration under section 2(7) to include data, the UPSCDRC held that WhatsApp’s users are consumers, entitled to all protections and rights in the act.

WhatsApp has since appealed against this decision of the UPSCDRC to the Allahabad High Court. Proceedings have been stayed until further notice. However, the decision of the UPSCDRC raises wider, more critical questions regarding the liability of digital platforms that provide free services. Such questions are relevant in today’s world, particularly considering the growing significance of artificial intelligence and its role in accelerating data monetisation. One such question reflects an ongoing industry debate as to whether telecom OTT platforms rendering services free of charge should be held to the same quality of service standards as telecom companies.

For many years, telecom companies have been urging lawmakers to include OTT platforms such as WhatsApp in a common regulatory framework. They argue that because OTT and telecom companies both provide communication services, they should be subject to similar quality of service standards. In 2023, Reliance Jio proposed compulsory audits for such OTT platforms to assess their quality of service, a technical standard applying to telecom companies.

Should the decision by the UPSCDRC be upheld by the high court, it will be a significant step forward in empowering consumers. Consumers of OTT platforms offering free services could then hold such companies accountable for lapses in their services. Of greater importance, defining data as consideration will significantly reshape jurisprudence in the digital world.

Consumption of goods and services is shifting online in a major way. Users may not even realise that they are paying for services with their data. Consumers should be entitled to at least a basic level of protection. This needs legislation and an interpretation of existing laws that keeps pace with the evolving digital landscape.

Ashima Obhan is a senior partner and Divyaansh Dulles is an associate at Obhan & Associates