Privacy Advocates Challenge Facebook’s WhatsApp Acquisition

WhatsApp at work.

WhatsApp at work.

Advocates from the Electronic Privacy Information Center and the Center for Digital Democracy want the Federal Trade Commission (FTC) to probe Facebook’s recent $19 billion acquisition of WhatsApp.

“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,” reads the beginning of the groups’ complaint (PDF). “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 Federal Trade Commission.”

Facebook has insisted that WhatsApp will remain an independent subsidiary, with its existing privacy and security policies in place.

Facebook confronts lawsuits and complaints from privacy advocates on a regular basis, a consequence of the social network’s massive stores of user information. Its every initiative over the past few years—whether Graph Search (its ultra-robust search engine), Facebook Gifts, mobile e-payment experiments, or acquisitions of smaller firms—draws significant scrutiny, so this latest complaint concerning WhatsApp should come as no surprise.

Given how Facebook’s growth and usage numbers have begun to stagnate, CEO Mark Zuckerberg evidently felt he needed to make a splashy move in the messaging app space. The WhatsApp deal came four months after Snapchat turned down Facebook’s $3 billion acquisition offer. Yet despite its enormous customer base (roughly 450 million and rising fast), WhatsApp offers some challenges for Facebook, starting with revenue: the app only generated $20 million last year, and its two co-founders hate the idea of advertising.

So if Facebook ever wants to make back its substantial investment, it will need to figure out how to squeeze additional revenues from the app’s business model—and that could mean monetizing WhatsApp’s user data in some form. Privacy advocates want to ensure that Facebook doesn’t exploit that data in ways ultimately harmful and/or annoying to users.

 

Image: WhatsApp

Comments

  1. BY Joy says:

    I was too shocked to hear the numbers as well. 19 B! thats a lot of money !!! How did they even put the valuation of Whatsapp so much high ??

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