Facebook, WhatsApp Acquisition Face Privacy Hurdle After EPIC Files FTC Complaint

whatsappMergers and acquisitions routinely face opposition and complaints. Facebook’s $19 billion deal to buy messaging system WhatsApp has been able to stay rather unopposed, until now.

Information privacy nonprofit groups, Electronic Privacy Information Center and the Center for Digital Democracy, are asking the Federal Trade Commission to investigate and block the mega-acquisition citing concerns with the two companies’ privacy policies.

EPIC and the CDD filed a complaint [PDF] with the FTC alleging that WhatsApp has made data-privacy promises to its 450 million users that will likely be unsupported, if not impossible, after the acquisition is complete.

By failing to make special provisions to protect user data in the event of an acquisition, WhatsApp “unreasonably creates or takes advantage of an obstacle to the free exercise of consumer decision making.

Specifically, WhatsApp users could not reasonably have anticipated that by selecting a pro-privacy messaging service, they would subject their data to Facebook’s data collection practices.

The complaint asks regulators to put the acquisition on hold and investigate whether the acquisition violates the FTC Act, which prohibits deceptive trade practices including companies that don’t follow published privacy policies.

In the event that the deal goes through, EPIC asks the FTC to put a provision in place that would isolate WhatsApp users’ information from being accessed by Facebook’s data collection process.

EPIC complaint to the FTC

EPIC complaint to the FTC

WhatsApp has staked its reputation on its stringent privacy policy. The company has made guarantees to users that it keeps a reasonable distance from consumer’s data. According to WhatsApps privacy policy, the company does not store messages, phone numbers, email addresses, or names from a device’s contacts.

It’s those privacy guarantees that EPIC is concerned will all but disappear once Facebook takes over; even though WhatsApp officials reassured users there would not be a privacy change associated with the acquisition.

In a blog post shortly after the deal was announced, WhatsApp founder Jan Koum wrote that the messaging system would remain “autonomous and operate independently” of Facebook.

The complaint is partially based on the fact that Facebook has regularly incorporated data from companies it has required.

Facebook has drawn numerous complaints for using consumers’ private data without their consent. Complaints have included posting users’ activity to third-party sites, placing user photos and names with ads, and the use of facial recognition.

The complaint states that the acquisition is also a possible violation of Facebook’s commitment to give users notice of privacy changes and to get their consent.

EPIC contends that WhatsApp gives Facebook a new set of data that could be used to add to its own database, but that neither company has notified users.

This isn’t the first complaint EPIC has filed with the FTC concerning privacy issues associated with privacy concerns.

“The Federal Trade Commission has previously responded favorably to EPIC complaints concerning Google Buzz, Microsoft Passport, Changes in Facebook Privacy Settings, and Choicepoint security practices,” EPIC officials said in a statement.

The FTC did approve Google’s acquisition of Doubleclick despite objections by EPIC.

The acquisition of WhatsApp came as quite a surprise when it was announced in February.

The mega-deal puts WhatsApp ahead of many major companies when it comes to estimated value, Consumerist reported last month.

Although the messaging company has maintained nothing will change, it has already announced a move to add a voice communication service.

Facebook’s shot at WhatsApp data gets both companies an FTC complaint [ArsTechnica]
Epic Urges FTC Investigation of WhatsApp Sale to Facebook [EPIC]