FTC Tells Facebook it will have to honor Whatsapp's privacy promise; EPIC and CDD letters spur commission action
By: Jeff Chester | Apr 10 2014
The Federal Trade Commission's Bureau of Consumer Protection sent a letter to Facebook and Whatsapp [attached] requiring the companies to honor the latter's privacy promises (no advertising, highly limited data collection etc). Facebook is in the process of acquiring Whatsapp. The Electronic Privacy Information Center (EPIC) and CDD sent two letters to the FTC urging the commission to address the privacy implications of the pending merger. The FTC's letter states that [excerpt]:
WhatsApp has made a number of promises about the limited nature of the data it collects, maintains, and shares with third parties -promises that exceed the protections currently promised to Facebook users. We want to make clear that, regardless of the acquisition, WhatsApp must continue to honor these promises to consumers. Further, if the acquisition is completed and WhatsApp fails to honor these promises, both companies could be in violation of Section 5 of the Federal Trade Commission (FTC) Act and, potentially, the FTC's order against Facebook.
Jeff Chester CDD's executive Director said: "We believe that despite claims that they would preserve Whatsapp's more privacy-friendly approach, the ultimate plan was to expand its mobile data collection practices and fully integrate it into Facebook. Facebook's future depends on its ability to successfully grow its mobile advertising, commerce, and payment applications. It did not spend $19 billion without planning to reap huge financial rewards by turning Whatsapp into an effective monetization machine for Facebook. The FTC is to be commended for sending a very strong signal that they will hold Facebook and Whatsapp accountable for their promises. The commission's action has likely spoiled, for now, the plans Facebook has developed to turn its $19b shopping spree into even more digital gold for themselves."
News reports say that the FTC has approved Facebook's deal with Whatsapp. But the commission's letter clearly connects the privacy concerns that EPIC and CDD raised that should be addressed in its merger review.