Privacy advocacy groups seek regulatory probe into Facebook-WhatsApp deal
08 Mar 2014
Privacy advocacy groups have approached US regulators to probe Facebook Inc's $19 billion acquisition of messaging service WhatsApp until the world's largest social networking giant reveals what it intends to do with the personal data of WhatsApp's 450 million users.
WhatsApp does not sell advertising, but charges users a flat fee of $1 a year to use the service, with the first year being free.
The founders of WhatsApp did not want to collect user data for advertising purposes and has said that it does not intend to use advertising as a means to generate revenue, which was one of the conditions of the sale to Facebook.
WhatsApp's privacy policy states, ''We do not use your mobile phone number or other personally Identifiable Information to send commercial or marketing messages without your consent or except as part of a specific programme or feature for which you will have the ability to opt-in or opt-out.''
In 2009, Jan Koum, founder of WhatsApp posted on the company's blog, ''So first of all, let's set the record straight. We have not, we do not and we will not ever sell your personal information to anyone.''
But non-profit groups, the Electronic Privacy Information Center (EPIC) and the Centre for Digital Democracy, say that there is no guarantee that post acquisition Facebook will adhere to the conditions of the sale.
Last month, Facebook took the internet industry by surprise by proposing to buy the popular smartphone-messaging app WhatsApp for a staggering $16 billion, its biggest acquisition to date. (See: Facebook to buy smartphone-messaging app WhatsApp for a staggering $16 bn)
In a filing with the US Federal Trade Commission (FTC), both groups asked regulators to investigate the deal "specifically with regard to the ability of Facebook to access WhatsApp's store of user mobile phone numbers and metadata.''
''Acting in reliance on WhatsApp representations, internet users provided detailed personal information to the company, including private text to close friends. Facebook routinely makes use of user information for advertising purposes and has made clear that it intends to incorporate the data of WhatsApp users into the user profiling business model.''
It alleged that Facebook regularly collected user data from companies it acquires, and cited as an example the photo-sharing service Instagram it had acquired in 2012.
Instagram users were not subjected to advertisements based on the content they uploaded to the site and like WhatsApp, Instagram's terms of service included a provision that in the event of acquisition, users' ''information such as name and email address, user content and any other information collected through the service may be among the items sold or transferred.''
Post acquisition, Facebook did in fact access Instagram users' data and changed the Instagram terms of service to reflect this change.
It added that the proposed acquisition will therefore violate WhatsApp users' understanding of their exposure to online advertising and constitutes an unfair and deceptive trade practice, subject to investigation by the FTC.
It also noted that Facebook is currently under a 20-year consent decree from the FTC that requires Facebook to protect user privacy and to comply with the US-EU Safe Harbor guidelines.
