FTC To Investigate Facebook after WhatsApp Purchase?

Mar 07, 2014 10:18 AM EST | Jordan Ecarma


Two privacy groups have filed a federal complaint following Facebook's acquisition of WhatsApp, a $16 billion purchase some believe could endanger the privacy of the messaging service's 450 million users.

While officials from both companies have stated that WhatsApp will remain a separate company, Facebook hasn't outlined exactly what role WhatsApp will play after the acquisition, causing privacy advocates to wonder if users' phone numbers, messages and other data will be used for marketing purposes.

"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 Electronic Privacy Information Center and Center for Digital Democracy said in the complaint filed with the Federal Trade Commission, as reported by Bloomberg.

"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."

The two groups have requested that the FTC investigate the purchase to see how users' privacy will be affected.

Facebook's track history when it comes to user privacy hasn't been stellar. The social network has offended its members with such features as Beacon, Sponsored Stories and facial recognition, which posted their activity with third parties, used their images in ads and more.

The company "is more likely to ask forgiveness than permission," noted Ars Technica.

On the other hand, WhatsApp has built much of its platform on vigilantly protecting its users' privacy.

"We have not, we do not, and we will not ever sell your personal information to anyone. Period. End of story," founder Jan Koum wrote in 2009 when the company was founded.

WhatsAPp, which is used to send around 50 billion messages daily, allows users to message text, pictures and video to any other users.

While the service is definitely popular, what's less clear is how it will make money for Facebook. The messaging app doesn't have ads and only charges 99 cents annually to users after their first year.

One possibility is that Facebook will use WhatsApp to further CEO Mark Zuckerberg's plan to bring connectivity to areas that don't have Internet.

"Facebook's goal is to bring more connectivity and utility to the world by delivering core Internet services efficiently and affordably--this partnership will help make that happen," Jodi Seth, a spokeswoman for Menlo Park, California-based Facebook, said in a statement, as reported by Bloomberg. "As we have said repeatedly, WhatsApp will operate as a separate company and will honor its commitments to privacy and security."

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