Facebook-WhatsApp Deal Approved By FTC, With Conditions

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Facebook’s (NASDAQ:FB) deal to acquire messaging service WhatsApp has the Federal Trade Commission’s approval, but it comes with some conditions from the regulatory agency. Facebook’s multibillion-dollar deal to purchase WhatsApp spurred concerns about the future privacy of WhatsApp users because the startup did not collect the level of user information that Facebook does.

Part of Facebook’s success is due to the fact the social media giant sells its user information to third parties, largely for advertising purposes. Facebook insisted that WhatsApp users would continue to enjoy their privacy because WhatsApp would continue to run as an independent company. However, some WhatsApp users were not convinced. The FTC began to investigate the deal, prompted by those privacy concerns. In a statement released April 10, the FTC said that it approves the deal with the conditions that WhatsApp users continue to receive the same level of privacy, are notified of changes to the privacy policy, and are informed they can either opt out or not use the service when changes to privacy are made.

The agency’s press release details the conditions WhatsApp must follow. “The letter notes that before making any material changes to how they use data already collected from WhatsApp subscribers, the companies must get affirmative consent. In addition, the letter notes that the companies must not misrepresent the extent to which they maintain the privacy or security of user data. The letter also recommends that consumers be given the opportunity to opt out of any future changes to how newly-collected data is used,” the FTC said in its press release. Facebook and WhatsApp received notice of the approval of the deal in the form of a letter from Jessica Rich, the director of the Bureau of Consumer Protection, to the legal representation of both companies. Facebook has a history with the FTC of users filing privacy complaints and failing to uphold what it promised its users. In 2011-2012, the social media site settled with the federal agency following charges that it had failed to uphold its promises to users regarding their privacy and security.

As a result of that settlement, Facebook is now required to get public assessments of its privacy practices every two years for the next 20 years. (The FTC has public records related to the case available online.) Meanwhile, WhatsApp has built its brand on a strong respect for user privacy. Users get an ad-free experience on WhatsApp because they pay a subscription fee for the service following a yearlong trial period to determine if they want the service.

Co-founder Jan Koum wrote in a blog post in March that the company would continue the usual respect for users’ privacy even after the completion of the Facebook deal. Facebook’s purchase of WhatsApp was announced in February. The social media giant paid about $19 billion in cash and stock for the messaging service. Facebook also owns social photo-sharing website Instagram, which it purchased in 2012 for $1 billion. Facebook announced that it would acquire virtual reality headset developer Oculus in March.

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