Are privacy concerns around Whatsapp sharing data with Facebook justified?

Whatsapp’s decision to share user data with parent company Facebook has created a furor among users and privacy advocates but this decision should not be that surprising given how valuable user data is for Facebook’s core business

e4m by Abhinn Shreshtha
Updated: Aug 31, 2016 8:11 AM
Are privacy concerns around Whatsapp sharing data with Facebook justified?

Whatsapp’s decision to share user data with parent company Facebook has created a furor among users and privacy advocates. According to media reports, advocacy groups like Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy will be filing a complaint with the Federal Trade Commission (FTC). Privacy regulators in the EU and Britain have also said that they will be taking a look into the issue.

So what exactly does this closer integration, as Whatsapp terms it, mean for users and advertisers?

The data sharing comes from a recently announced privacy policy change by Whatsapp, it’s first in four years. Under the new terms, Whatsapp said it will be looking for “greater integration” with Facebook in the coming months. “(But) by coordinating more with Facebook, we'll be able to do things like track basic metrics about how often people use our services and better fight spam on WhatsApp. And by connecting your phone number with Facebook's systems, Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them,” said the company in its official blog.

Whatsapp will basically be sharing user data like phone number, usage information, etc. It says that it will not share messages or media shared by users on Whatsapp, nor will any of the data be posted on Facebook. It justifies the sharing by saying that it will help better coordination between Facebook and Whatsapp, improve services across both platforms, make fighting spam better while enabling Facebook to make more relevant suggestions in terms of friends and ads.

Whatsapp has also clarified that there is no plan to show third party ads on Whatsapp. However, it also added, “In the future, we will explore ways for you and businesses to communicate with each other using WhatsApp, such as through order, transaction, and appointment information, delivery and shipping notifications, product and service updates, and marketing.” What this means is that Facebook does see Whatsapp as an essential component of its marketing strategy though we might see it being used in a far more subtle manner than just displaying banner ads.

Facebook bought Whatsapp for $19 billion in 2014, and so far, it has been pretty happy to let it run as a free app without attaching any burdens of revenue generation on it. When we had spoken to digital experts back in 2014, the common consensus was that Facebook was playing the long game with Whatsapp, an app that is now used by more than 1 billion people.

It is hardly surprising that Facebook would one day want to leverage all the precious user information that Whatsapp generates to improve its own advertising solutions. After all, user data is what it has built its entire business on. This holds especially true for the mobile messaging where Facebook is still behind many of the other IM companies.

Abhay Doshi, Senior VP (Product Management & Marketing) at Flytxt, also agrees that it is did not make sense for Facebook to let a $19 billion investment go to waste. “I think they are trying to enrich their targeting. A lot of conversations are moving out of Facebook to private chats. The fact is that Facebook can now associate every user with mobile numbers, which was a missing link for it now. This is huge news for them.”

So is the outrage justified? “There is a lot more discussion about privacy happening just now. Even though this was expected, Facebook had said that it would keep Whatsapp clutter-free and privacy policies would not change. So privacy watchdogs will pay more attention to this, especially the EU,” opined Siddharth Hegde, MD & Founder at Ethinos Digital Marketing.

Doshi feels that the ones who really care about privacy will be a bit wary about their phone numbers now being with Facebook. His argument is that with access to the phonebook, Facebook will now be able to suggest friends to users who are not connected on Facebook, irrespective of whether the two want to connect on the platform. “One thing that I suppose could happen is that other IM apps like Snapchat, Hike, etc. will start introducing encrypted messaging, etc., which might attract the ones concerned about privacy and cause Whatsapp to lose these users,” he said.

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