The update announced in January, which will take effect in May, allows WhatsApp to share certain user data with Facebook and its units, causing a global backlash, including in India, its largest market with more than 500 million. users.
The 21-page antitrust order came as WhatsApp expands its digital payment services to millions of Indians.
India’s Competition Commission said WhatsApp violated competition laws “through its exploitative and exclusionary behavior … under the guise of a policy update.”
He ordered his investigative unit to launch an investigation and submit a report within 60 days. These probes generally take several months.
Sharing data by WhatsApp in a way that is “neither completely transparent nor based on the voluntary and specific consent of the user,” seems unfair to users, the watchdog added.
The regulator said WhatsApp told it the policy update did not raise any competition law issues.
WhatsApp responded in a statement that it will engage with the commission, noting the company’s commitment to protecting encryption and ensuring transparency in how new business features work.
WhatsApp previously said the changes only affected user interactions with businesses.
In India, users concerned about privacy downloaded competing apps like Signal and Telegram, according to data from research companies.