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Implications of the Entry of WhatsApp Pay in the Indian Online Payment Application Market

The introduction of WhatsApp Pay in the Indian market has been toyed with by the regulators and undertakings for over two years now. In 2020, March witnessed a complaint being filed before the Competition Commission of India, alleging that the installation of WhatsApp Pay in the devices of all WhatsApp users amounts to an ‘abuse of dominant position’. Before deciding this matter, the Commission approved Facebook’s acquisition of shares in Reliance’s Jio Platforms in June 2020. Eventually, in August 2020 the Commission dismissed the complaint filed in March finding no merit in the allegations made.

By way of this submission and in adherence with chronology, Mehar Singh shall strive to analyse the approval of the acquisition [I] and the implications thereof, followed by an evaluation of the Commission’s decision on Harshita Chawla’s complaint [II]. Before borrowing lessons from the European Commission [IV], the author shall also delve into the CCI’s recent decision on the implications of the presence of Google’s GPay in the online payment application market [III].

I. Jaadhu’s Acquisition of Jio Platforms

I.A. Undertakings in question

Jaadhu was incorporated in March 2020 under the laws of the State of Delaware, USA and at the time of the notification, had no business in India. It is a wholly-owned subsidiary of Facebook. Inter alia, the Facebook group owns Messenger, Instagram, WhatsApp, Oculus, Workplace and Portal.[i]

Jio Platforms is a company incorporated in India and a subsidiary of RIL. Jio Platforms owns and operates digital applications and holds controlling investments in certain technology-related entities. Reliance Jio Infocomm is a licensed telecommunication operator, providing mobile telephone services to users across India.[ii]

I. B. Combination in question

Jaadhu acquired approximately 9.99% of the equity share capital in Jio Platforms and is now entitled to appoint a director on the Board of Directors of Jio Platforms and an observer to attend board meetings. This has been specified by the agreement between the undertakings preceding the notification of the proposed combination to the Commission. Jaadhu is also entitled to receive information relating to financial performance of Jio Platforms and those required for tax and other compliances. The undertakings have also entered into an arrangement where WhatsApp users will be connected to JioMart through an electronic chat feature via WhatsApp Pay.[iii]

I.C. Effects of the combination

I.C.1. E-commerce

In the notification submitted to the Commission, the undertakings have stated that WhatsApp will be one the several portals through which JioMart can be accessed by a user. The other routes to access JioMart include its website, the mobile app, and the MyJio App. The Commission found that this combination will raise no competition concern in the e-commerce market since generically, these platforms are accessed by their users through the App directly and WhatsApp Pay does not have the potential to become the primary medium of accessing the payment portal.

However, what the Commission seems to have conveniently overlooked is that WhatsApp is one of the most used applications by every smartphone user in the country.[iv] Embedding JioMart in WhatsApp will enhance its accessibility to users in a manner that will establish it as a dominant player in the nascent stage of its entry in the market itself. This shall pose an unfair advantage to WhatsApp Pay over other such payment portals which had to establish themselves as market players bereft of the buttress of the most powerful instant messaging application in the world.

I.C.2. UPI based digital payment applications

The Commission determined that the quantum of UPI payments to JioMart made through WhatsApp Pay shall not be alarmingly high. It derived this observation by applying the rationale that JioMart is a new entrant in this sector and there are other significant players in the market such as Paytm, Google Pay and PhonePe.[v]

While this may have been true if JioMart was entering the market independently to establish itself in the e-commerce space, the fact that its entry into the market is bolstered and cushioned by its accessibility through WhatsApp Pay renders the Commission’s discernment rather myopic.

I.D. Potential antitrust complications

In the combination under consideration, the Target and the Acquirer are both dominant players in their respective relevant markets with Jio’s consumer base being a third of Indian wireless subscribers.[vi]

Amongst the featured mediums of Facebook, we are currently concerned with WhatsApp, which is also a dominant player in its relevant market for instant messaging services using consumer communication apps through smartphones.

As a result of the combination, when the installation of WhatsApp in a device is accompanied by the pre-embedded JioMart platform, it principally amounts to an abuse of dominance as conceived by the Indian Competition Act. The consumer will sign up to be a WhatsApp user by downloading the application, and the embedded JioMart will act as an appendage (supplement) to the installation of the application by the user.

Further, looking at the concern of vertical integration, let’s break it down to an assembly chain. Jio is every Indian’s go-to for a cost-effective and efficient internet connection in their smartphone. WhatsApp is every Indian’s go-to free-of-cost instant messaging application which needs to be fuelled by an internet connection that we are assuming the user in question is deriving from his Jio subscription.

As a result of this combination, WhatsApp will now be featuring JioMart, in turn, furthering the economic interests of Jio. Thus, this has amounted to allowing these two dominant players of their respective relevant markets to form a self-sustaining entity that has the potential to jeopardise the market shares of other competitors, and in turn, imperil the prevalence of free and fair competition in the market in question.

As explained above, the vertical integration in question poses a threat to platform neutrality, which necessitates that all products that are featured in the market should be afforded unbiased and equitable treatment. This is a potential complication, because in the supply chain at hand, Jio shall be acting as an internet service provider (upstream player) and as a stakeholder in the online payment application, namely WhatsApp Pay (downstream player).

II. Harshita Chawla’s Complaint

In March of 2020, the Commission received a complaint stating that the conduct of WhatsApp and Facebook, namely the automatic installation of WhatsApp Pay for all WhatsApp users amounts to an abuse of their dominant position and a violation of Section 4 of the Indian Competition Act.[vii] The alleged anticompetitive conduct in the complaint was to have leveraged dominance in one market (OTT messaging application market) to manipulate another market (online payment application market).

Facebook denied all liability placed on it in the complaint, stating that WhatsApp is a severable entity and the marketing gimmicks and executive decisions of the two undertakings are independent of one another.

The two undertakings, namely Facebook (Jaadhu ownership) and WhatsApp are in a hand in glove arrangement with each other and have spun a rather convoluted conundrum for regulators and consumers alike.

The Commission found an absence of an abuse of dominance since the mere presence of the WhatsApp Pay feature does not amount to the user making transactions on it. Further, the Commission found that neither tying, nor bundling had been indulged in by the undertakings in question.

II.A. Analysis

By way of this Order, the Commission has established that its evaluation of anticompetitive conduct still remains ex post, as opposed to an ex ante approach. In the wake of an investigation of the conduct of big tech companies by more mature antitrust jurisdictions, and placing on record that a big tech company is also a stakeholder in the matter at hand, it is advisable for the Commission to identify combinations and conduct of undertakings that possess the potential to cause an appreciable adverse effect on competition (AAEC) and regulate them ahead of compromising the competition of the relevant market in question.

Further, the Commission dismissed the concerns that the informant had raised with regard to data issues on the ground of not making a concrete and discernible allegation. However, the Commission is empowered to initiate an investigation suo motu, or of its own accord, and given that other jurisdictions are initiating probes into the conduct of technology giants across the world, the complaint in itself should have been sufficient to tip off the Commission and initiate an investigation into the conduct of the undertakings accordingly.

The Commission found that the mere presence of the WhatsApp Pay does not translate to the user making use of it to process and carry out payments. As stated above, the Commission has turned an apparent blind eye to the inherent nature of every customer, which is to seek convenience in his everyday life.[viii]

Thus, when users of other online payment applications like, inter alia GPay, PayTM, PhonePe discover that the instant messaging application that is already installed in their phone is now also allowing them to make payments, they will invariably switch to WhatsApp Pay. This shall stem from the basic rationalisation, why utilise two separate applications for two independent purposes, when one application can get the job done just as easily?

Prima facie, the Commission’s determinations come across as accurate since there is no express anticompetitive conduct that the undertaking(s) in question have indulged in. However, the Commission must not view the conduct under scrutiny severed from the market conditions and the manner of entry of the undertaking in question.

While the entry of a new market player is a conventional method to further and foster healthy competition in a particular market, said entry is owned and facilitated by giants across relevant markets does not necessarily come across as a bonafide market entry and might end being counterproductive.

The Commission has been beguiled by Jio’s guised abusive behaviour in the past too, when it found that its market entry being cushioned by predatory pricing did not classify as anticompetitive conduct. Irony lies in the fact that in that determination also, the Commission’s rationale was that the player in question, severed from its ownership was not a dominant entity in the relevant market at the time of assessment.

It is pertinent for the Competition Commission of India to realise that it cannot cleave a holding of a market giant from its parent undertaking when assessing its position in the market, and to keep making the same mistake is a display of parochial conduct on its part.

When WhatsApp Pay was launched in Brazil, its antitrust regulators went ahead and suspended the service in the pursuit of preserving an adequate competitive environment.[ix] Recently, in an antitrust probe, the German Federal Court found that Facebook has been making use of personal data, allegedly in a bid to provide each user with a personalised experience.[x]

In the light of these decisions, the Indian Competition Commission has resorted to an approach that can only be termed as cautious and rudimentary at best.

III. CCI’s probe on pre-installation and dominance of Google Pay in the market

Given the dominant position of Google, the Commission received a complaint that Google was exploiting its control over the Android smartphone operating system and its own play store, and was favouring Google Pay over other online payment applications.[xi]

The Commission found that all purchases of applications and in-app purchases from Google’s play store have to mandatorily be routed through Google Pay. The Commission also observed the Google Pay is pre-installed in all android devices, and this may lead the user to accept GPay as the default payment application and most users may not venture out and download a competing online payment application. Thus, the Commission found that this warranted further investigation into the conduct of Google.

The Commission has only recently given the go-ahead for Facebook’s acquisition of stock in Jio Platforms, which coupled with the rolling out of WhatsApp Pay in the Indian market shall amount to the creation of another market giant, also, bolstered by two existing market giants. On the other hand, once abusive conduct has prima facie been on the part of Google with regard to GPay, the Commission gladly agreed to initiate an investigation into the dominant nature of its conduct.

This leads one to the conclusion that the Commission is inviting dominant players to assert and abuse their dominance, and it still only believes in administering damage control and not prevention of damage. This observation may find foundation in the fact that the Indian regulator is still apprehensive, and is yet to strike the balance between preventing the establishment of hegemony and ascendance in a particular market and allowing new entrants in a market in furtherance of free and fair competition.

IV. EU’s Google Android Decision

In 2018 the European Commission fined Google with a sum of €4,342,865,000 taking into account the duration and gravity of the abuse of its dominance. This stemmed from the Commission’s finding of Google having indulged in three classifications of abusive conduct.[xii]

Google’s conduct amounted to rival search engines losing the opportunity to compete in a free and fair manner. When each android device comes pre-installed with Google’s search engine and browser, it strongly dissuades users from installing and using another search engine.[xiii]

To draw a parallel, when the pre-installation of Google’s search engine and browser in android devices can be recognised as a tying practice amounting to anticompetitive conduct by the European Commission; the embedding of Facebook’s WhatsApp Pay in the devices of all WhatsApp users in India should also be recognised as anticompetitive conduct by the Competition Commission of India.

Written by Mehar Singh Dang.


[i] ‘CCI approves acquisition of 9.99% stake in Jio Platforms by Jaadhu Holdings LLC’, Ministry of Corporate Affairs, Government of India (24 June 2020) <> accessed 31 January 2021

[ii] ‘RIL’s new digital unit christened Jio Platforms’ TheHinduBusinessLine (29 November 2019) <> accessed 31 January 2021

[iii] ‘NPCI gives approval for WhatsApp to go live on UPI in a graded manner’ National Payments Corporation of India (5 November 2020) <> accessed 31 January 2021

[iv] Harshita Chawla v. WhatsApp (Case No. 15 of 2020), Competition Commission of India, <> accessed 02 January 2021 [v] Notice under Section 6(2) of the Competition Act, 2002, filed by Jaadhu Holdings LLC’ (Combination Registration No. C-2020/06/747), Competition Commission of India, <> accessed 02 January 2021

[vi]Notice under Section 6(2) of the Competition Act, 2002, filed by Jaadhu Holdings LLC’ (Combination Registration No. C-2020/06/747), Competition Commission of India, <> accessed 02 January 2021 [vii]Harshita Chawla v. WhatsApp (Case No. 15 of 2020), Competition Commission of India, <> accessed 02 January 2021 [viii] Francisco Liébana-Cabanillas, Inmaculada García-Maroto, ‘Mobile Payment Adoption in the age of digital transformation: the case of Apple Pay’ (Sustainability, MDPI, Open Access Journal, 6 July 2020) accessed 28 January 2021

[ix]Mario Sergio Lima and Kurt Wagner, ‘Brazilian Authorities Suspend WhatsApp Payments’ (Bloomberg, 24 June 2020) <> accessed 02 January 2021

[x]‘The Federal Court of Justice provisionally confirms the allegation of abuse of a dominant position by Facebook’ (Press Release No. 080/2020), Federal Court of Justice, <> accessed 02 January 2021 [xi]XYZ v. Alphabet Inc., Google LLC (Case No. 07 of 2020), Competition Commission of India, <> accessed 02 January 2021 [xii] ‘Antitrust: Commission fines Google €4.34 billion for illegal practices regarding Android mobile devices to strengthen dominance of Google's search engine’ (European Commission, 18 July 2018) <> accessed 02 January 2021

[xiii] Frederico Etro, Christina Caffarra, On the economics of the Android case, European Competition Journal, Volume 13, 2017


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