Privacy Groups Ask FTC To Block Facebook WhatsApp Deal
By Adam Dickter / CIO Today. Updated March 07, 2014.
It seems Mark Zuckerberg can't buy a bag of groceries these days without raising concerns from privacy activists. But the Facebook founder's multibillion-dollar acquisition of WhatsApp, which allows more than 400 million people to exchange messages and photos, is of so much concern to the Electronic Privacy Information Center and the Center for Digital Democracy that the non-profit groups want the government to intervene.
A complaint filed Thursday with the Federal Trade Commission by the two organizations, which we reviewed online, notes that WhatsApp built its reputation and its user base on a commitment not to collect user data for advertising revenue. Facebook, on the other hand, routinely makes use of that data and intends to incorporate WhatsApp data into its user-profiling business model.
What's at stake? The plaintiffs cite press reports that WhatsApp, founded in 2009 in California by Jan Koum and Brian Acton, processed 27 billion user messages in one day in June 2013. When Facebook's $19 billion deal was announced, the app had a reported 450 million monthly users exchanging 50 billion messages a day.
Facebook routinely incorporates data from applications it acquires, say the plaintiffs, and when it revamped its messaging system in 2010 it automatically opted all users in.
All this means that people who downloaded and used WhatsApp did so without knowing that their data would one day end up in Facebook's Menlo Park servers.
In fact, the app's data mine may have been a primary asset in the deal.
"Facebook is not only buying a popular messaging app, it is also acquiring the addresses and telephone numbers of 450 million users worldwide," Wim Nauwelaerts, a lawyer specializing in European Union data protection, told Bloomberg News in a quote included in the complaint.
The FTC has grounds to block the acquisition because federal law prohibits unfair and deceptive acts and practices and the commission is empowered to stop those practices, the privacy groups say. Therefore the commission should investigate the acquisition, and its authority to block it until the privacy issues are resolved. But if the deal does process, the FTC should order Facebook to insulate WhatsApp users' information from data collection practices.
Our requests via e-mail for comment from Facebook and WhatsApp were not answered in time for publication.
However, Julia Horowitz, consumer protection counsel at the Electronic Privacy Information Center, told us she was confident the FTC would act because of prior interventions with Google over its Buzz social network, Microsoft over its Passport wallet system, and Facebook over potentially misleading security policies.
"We have a track record of putting claims to the FTC which they decide to investigate," she said Friday.
Horowitz said European privacy monitors were also taking action to protect consumers against possible ramifications of the WhatsApp acquisition.
But in 2014, shouldn't everyone assume that nothing they post online or transmit via the Internet is private?
"There are lots of efforts to allow people to interact with the Internet privately, and WhatsApp was going to be one of them," Horowitz replied. "It's unfair and premature to say it's a foregone conclusion that nothing is private and not in sync with the efforts we see in technology and innovation."