Facebook’s (NASDAQ:FB) plan to buy WhatsApp for $19 billion may be perking up the ears of European privacy watchdogs, according to a report from Bloomberg on Wednesday. Watchdog groups want to know how Facebook will handle the mobile-messaging app’s massive vaults of client data.
Facebook’s acquisition of WhatsApp will mark the biggest internet merger in more than a decade, and privacy groups are likely to take notice and take interest in how this will affect consumers, according to Jacob Kohnstamm, who spoke with Bloomberg. Kohnstamm leads an EU group of privacy officials known as the Article 29 Data Protection Working Party.
According to Bloomberg, any one of the European Union’s 28 data privacy authorities can choose to probe WhatsApp; the company isn’t established in Europe, and chief executive Jan Koum has said the company will continue to act independently.
In case you’ve been living under a rock for the past week or so, WhatsApp is a mobile messaging service that currently boosts 450 million users. Users can download the application on a variety of different mobile operating systems, and unlike traditional SMS text messaging, which consumers must pay for through their mobile carrier, WhatsApp is free for the first year and costs just 99 cents the second year. Facebook’s Mark Zuckerberg announced the company’s plans to buy the mobile messaging startup for $19 billion earlier last week.
The EU is primarily concerned about the virtual gold mine of data from user’s address books on their phones, which is tapped into when they download the application, Kohnstamm said. It’s important to remember that it’s not merely the users who are registered with WhatsApp that Facebook will have access to, but everyone those users are in contact with as well. “It’s tempting to use this data,” Kohnstamm added, saying, “the collection of data of people that aren’t using WhatsApp is extreme and not compliant with Dutch or European law.”
“Facebook is not only buying a popular messaging app, it is also acquiring the addresses and telephone numbers of 450 million users worldwide,” said Wim Nauwelaerts, a lawyer who specializes in EU data protection laws who spoke with Bloomberg. ”Many of these users are already signed up to Facebook, so through this deal, Facebook will be able to build complete profiles on users,” and “this begs the question to what extent Facebook intends to ‘monetize’ the data.”
Kohnstamm said it’s possible that Facebook would have to pay a Dutch fine which would be “quite impressive,” in order to soothe the Dutch authorities. There is no limit on how high the fine could be, Kohnstamm added, although it will depend on the severity of the case and whether or not Facebook knowingly failed to comply.
This isn’t the first time that Facebook has come under scrutiny by privacy groups, however. In 2012, the social networking giant was forced to delete data it collected for its facial recognition program after a probe issued by an Irish privacy regulator.