Facebook’s WhatsApp Deal Sparks Privacy Concerns

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Facebook’s (NASDAQ:FB) $19 billion acquisition of mobile messaging app WhatsApp is making some privacy advocacy groups nervous. The deal could be postponed.

WhatsApp is a messaging service that is available for a variety of smartphones including Apple, Android, Nokia and Windows phones. Unlike many apps that are free downloads, WhatsApp has no advertising. In fact, the app is deliberately ad-free. The company has an entire page dedicated to explaining why they do not sell ads. The reason is so that its team does do not collect user data.

“At every company that sells ads, a significant portion of their engineering team spends their day tuning data mining, writing better code to collect all your personal data, upgrading the servers that hold all the data and making sure it’s all being logged and collated and sliced and packaged and shipped out…”

WhatsApp would rather charge users than allow advertising. That has been the company’s policy since it was founded more than five years ago. The messaging service is a free download with free service for the first year. It is a top app for both the Apple App Store and Google Play on the free apps charts. After that year, users who want to continue using the app can pay a $1 subscription fee.

Facebook, the company looking to buy WhatsApp, sells ads. Much of its revenue comes from selling advertising. And it uses your data to make those sales. Look at an item on Amazon or another site and it may show up as an advertisement on the right side of your news feed later. Facebook has stated that the company will allow WhatsApp to operate independently and not mine the data of its 450 million users.

Two digital privacy advocacy non-profit groups, Electronic Privacy Information Center and the Center for Digital Democracy, asked the Federal Trade Commission to halt the deal so it can investigate to get a better idea of what exactly Facebook intends to do to protect that data. The 15-page complaint lays out the potential issues that may be raised by the acquisition.

“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.”

The document also claims that similar European agencies are conducting investigations into the deal. Media reports indicate that Dutch and other European agencies are indeed looking into the finer details of how the acquisition would affect WhatsApp users’ privacy.

This concern over Facebook potentially mining data is not an unfounded concern. When the company acquired photo-sharing social media platform Instagram in 2012, it gathered social user data from the latter. This also happened when Yahoo acquired Tumblr last year and when Google acquired YouTube. The larger company getting data from the smaller company is commonplace.

So far the FTC has released no comment in response to the complaint.

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