India demands WhatsApp withdraws its new privacy policy

India’s technology ministry has written to Facebook Inc-owned WhatsApp asking the messenger to withdraw its updated privacy policy, which came into effect on May 15, in its biggest market by users, two government sources said on Thursday.

WhatsApp earlier this year said users will have to review its updated terms by Feb. 8 but delayed the rollout of new business features to mid-May following a global user backlash over the company’s data-sharing practices.

The technology ministry’s May 18 letter to WhatsApp also said the government could take legal action against the firm if it did not comply with the provision of India’s Information Technology Act, one of the sources said, adding that the company has been asked to respond by May 25.

With more than 500 million users in India, WhatsApp has big plans for the growing digital payments space, including selling health insurance via partners. But government pressure to withdraw the policy could create a new headache for the firm.

WhatsApp’s new privacy policy, which allows it to share limited user data with Facebook and its group firms, has also led to at least one legal battle in India where the anti-trust regulator has also ordered a probe into it.