When Facebook (FB) announced its plans to acquire WhatsApp in February 2014, it outbid Google paying twice as much as the search engine heavyweight’s offer. WhatsApp’s founders attached a purchase price of $16 billion: $4 billion in cash and $12 billion remaining in FB shares. This price tag was overshadowed by the actual price FB paid: $21.8 billion, or $55 per user. FB agreed to pay $19.6 billion—adding $3.6 billion to the original price as compensation to WhatsApp employees for staying on board at FB. However, FB share prices soared to $77.56 from $68 by the time the regulatory approval process concluded in October. By then, the agreed upon 184 million FB shares inflated the final sale price by an additional $1.7 billion. Since then, FB has not been able to monetize the user base of WhatsApp which stands at over 2.2 billion users per day.
WhatsApp Privacy Policy Update
WhatsApp’s updated privacy policy, which was released on January 4, in essence takes away the option users had until now to not share their data with other FB-owned and third-party apps. If users do not agree with the updated privacy policy of the messaging platform, they will have to quit WhatsApp by February 8 – the date from which the updated privacy policy comes into effect.
Lack of Safeguards for Indian Users
India’s slackness in enacting a robust personal data protection law leaves the common user on these platforms at the mercy of social media giants. Not everyone is supposed to know the finer details of the user agreement and even if someone reads the agreement, it would take sound understanding of personal and data laws to decipher the clauses. All this makes a strong case for a blanket statute which safeguards all types of users.
WhatsApp is legally bound to not share data with FB in the European Region because it’s an infringement of the provisions of the General Data Protection Regulation (GDPR).
Had the data protection law or regulation been in place, this issue would not have arisen in the first place. Section 5 of the Personal Data Protection Bill, which was introduced by the Parliament, says that you can only use the information for purposes that are reasonably linked to the purpose for which the information was given. If that section was there, then this (the new update in WhatsApp’s privacy policy) would have been illegal. This is exactly the reason as to why users in the European Union are safe from this change.
What information does WhatsApp share with the Facebook Companies?
WhatsApp currently shares certain categories of information with FB Companies. The information includes account registration information (such as your phone number), transaction data, service-related information, information on how a user interacts with others (including businesses) when using Whatsapp, mobile device information and IP address.
Case for WhatsApp Privacy Policy Update
FB is making a case for updating the privacy policy of Whatsapp by enumerating the incremental improvements in overall user experience. Ensuring better security and fighting spam are at the top of FB’s agenda, though, critics have been pointing out how FB would integrate its ads based on the data collected from user profiles and preferences. FB CEO Mark Zuckerberg in 2019 talked about his cross-platform vision across FB Messenger, Instagram and WhatsApp — he called it “interoperability”. Instagram’s Direct Messages and FB Messenger have already been integrated.
Users Looking for Alternatives
After the panic that spread from lack of clarity about the privacy policy update, WhatsApp had to issue a statement. This was nothing more than a firefighting effort, while many current users of WhatsApp are in the process of finding an alternative messaging app. Telegram and Signal witnessed spike in downloads after some noted tech entrepreneurs suggested that FB is abusing its dominance. It is an evolving story, and only time will tell whether the Indian Government promulgates new data protection law or WhatsApp tweaks the fine print to address justified privacy concerns.
WhatsApp Public Statement After Public Outrage
“As we announced in October (2020), WhatsApp wants to make it easier for people to both make a purchase and get help from a business directly on WhatsApp. While most people use WhatsApp to chat with friends and family, increasingly people are reaching out to businesses as well. To further increase transparency, we updated the privacy policy to describe that going forward businesses can choose to receive secure hosting services from our parent company Facebook to help manage their communications with their customers on WhatsApp. Though of course, it remains up to the user whether or not they want to message with a business on WhatsApp.”
“The update does not change WhatsApp’s data sharing practices with Facebook and does not impact how people communicate privately with friends or family wherever they are in the world. WhatsApp remains deeply committed to protecting people’s privacy. We are communicating directly with users through WhatsApp about these changes so they have time to review the new policy over the course of the next month.”