FTC clears Facebook's WhatsApp deal, but warns on data collection
The U.S. Federal Trade Commission on Thursday cleared a path for Facebook’s acquisition of WhatsApp to proceed, though it called on both companies to be mindful of their data collection policies.
The agency sent a letter to both companies, urging them to proceed with caution in how they deal with users’ data, given Facebook’s pending acquisition of WhatsApp. The letter comes following a request by privacy groups that the FTC investigate the deal.
The deal, announced in February, has raised concerns for the FTC, partly because both companies collect users’ data, but have different policies governing how data is used.
“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,” said Jessica Rich, director of the Bureau of Consumer Protection at the FTC, in the letter.
Regardless of the acquisition, Rich said, “WhatsApp must continue to honor these promises to consumers.”
Penalties could be assessed
If the acquisition is completed and WhatsApp fails to honor its promises, both WhatsApp and Facebook could be in violation of Section 5 of the Federal Trade Commission Act, and potentially a previous FTC order against Facebook on privacy, she said.
Facebook is pleased that the FTC completed its review and cleared its acquisition of WhatsApp, a company spokeswoman said by email. “Naturally, both companies will continue to comply with all applicable laws after the transaction closes,” she said.
WhatsApp did not immediately respond to a request for comment on the letter.
WhatsApp in its terms of service says it does not collect names, addresses or email addresses, just mobile phone numbers. Also, the company says it does not collect location data, but users may voluntarily share their location with other users.
“We do not use your mobile phone number or other personally identifiable information to send commercial or marketing messages without your consent,” except as part of a specific program in which people may opt in or out, the terms say.
But if Facebook were to violate any of WhatsApp’s promises should the acquisition be completed, it would constitute a deceptive or unfair practice under the FTC Act, Rich said. If Facebook were to use any of WhatsApp’s data in a way that’s inconsistent with WhatsApp’s terms, it would need the consent of users first, and have to provide them with an opportunity to opt out, she said.
The FTC has brought cases against companies such as Genelink and Twitter for not keeping promises about privacy, constituting a deceptive practice under Section 5 of the FTC Act.
The FTC will monitor the practices of Facebook and WhatsApp, Rich said.