Why WhatsApp’s New Privacy Rules Have Sparked Alarm
People are seen as they check mobile devices whilst standing against an illuminated wall bearing WhatsApp Inc’s logo. (Photographer: Chris Ratcliffe/Bloomberg)

Why WhatsApp’s New Privacy Rules Have Sparked Alarm

Bookmark

Facebook Inc.’s WhatsApp began alerting its 2 billion users in early January to an update of its privacy policy -- and if they wanted to keep using the popular messaging app, they had to accept it. The new terms caused an outcry among technology experts, privacy advocates, billionaire entrepreneurs and government organizations and triggered some defections to rival services. WhatsApp initially said the changes were necessary to help it integrate better with other Facebook products. Then it pushed back the deadline amid the backlash. Now it’s pledging “to try and address concerns we’re hearing.”

1. What does the policy say?

WhatsApp is reserving the right to share data it collects about you with the broader Facebook network, which includes Instagram, regardless of whether you have accounts or profiles there. Much of the policy, which is about monetizing WhatsApp, is broadly in line with what came before. Once WhatsApp started to share data with Facebook in 2016, users were given a brief window to opt out. Those that didn’t, and all new accounts created since that policy was enacted, have been sharing some data with Facebook for years.

2. So what’s changing?

The new policy was to become mandatory for everybody from Feb. 8, but the company delayed that to May 15 while it further explained the changes. In a statement Feb. 18, it said that “in coming weeks, we’ll display a banner in WhatsApp providing more information that people can read at their own pace.” It also said that “eventually, we’ll start reminding people to review and accept these updates to keep using WhatsApp.” After mid-May, users who don’t accept the new policy will no longer have full functionality.

3. Can Facebook read my WhatsApp now?

No. Conversations with your friends are encrypted end-to-end, meaning not even WhatsApp itself can access them. However, by using WhatsApp you may be sharing with it your usage data, as well as your phone’s unique identifier, among other types of so-called metadata. These may be linked to your identity, according to WhatsApp on its listing in Apple Inc.’s App Store, and it’s this data the privacy policy stipulates must now be agreed can be shared with Facebook.

4. Why does Facebook want the data?

It says it needs it to help operate and improve its offerings. More broadly, almost all of the $21.5 billion in revenue Facebook generated in the third quarter of 2020 came from ads, and there are none in WhatsApp. The company wants to be able to serve more targeted ads to people on Facebook and Instagram by also knowing their usage habits on WhatsApp, and let businesses take payments in WhatsApp for items that, for instance, were clicked on in Instagram ads.

5. What was the fallout?

Turkish President Recep Tayyip Erdogan’s media office and his country’s defense ministry said they were dropping WhatsApp. Technology billionaire Elon Musk endorsed rival app Signal to his 42 million Twitter Inc. followers. Signal uses the same open-source encryption technology as the Facebook-owned app, and its parent company Signal Messenger was co-founded by WhatsApp co-creator Brian Acton. For years it’s been popular among whistleblowers and privacy advocates.

Why WhatsApp’s New Privacy Rules Have Sparked Alarm

6. Is the policy the same globally?

No. There’s a difference in the text for Europe compared with the rest of the world. In the U.S., for instance, WhatsApp explicitly says it wants to be able to let users start connecting their Facebook Pay account “to pay for things on WhatsApp,” and let them chat with friends on other Facebook products, such as Portal, “by connecting your WhatsApp account.” This text does not appear in the version applicable to Europe.

7. Why is Europe being treated differently?

European data protection authorities, which under the European Union’s strict privacy laws are empowered to fine companies as much as 4% of global annual revenue if they breach the bloc’s rules, in 2016 had expressed “serious concerns” about the sharing of WhatsApp user data. EU antitrust authorities in 2017 fined Facebook 110 million euros ($134 million) for misleading regulators during a 2014 review of its takeover of WhatsApp but stopped short of overturning the merger approval. Facebook had told EU regulators during the review it technically wasn’t possible to combine WhatsApp data with its other services.

8. Who benefits from the privacy policy changes?

Businesses, mainly. WhatsApp says companies will be able to use new tools to communicate with, and sell to, customers on Facebook’s platform. It also said that specifically for the messages exchanged between a user and a company, that business “can see what you’re saying and may use that information for its own marketing purposes, which may include advertising on Facebook.” But other beneficiaries include rival services such as Signal. On Jan. 12, Signal shared data on Twitter that suggested downloads for Android phones jumped from an all-time total of about 10 million to more than 50 million in one day. On Jan. 13, it was the most popular free app on Apple and Google’s stores in many countries, including the U.S., the U.K., and many others in continental Europe. By Jan. 20, however, the app’s position in store charts had begun slipping as WhatsApp responded to criticism.

The Reference Shelf

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.