FTC warning unlikely to stop Facebook from changing WhatsApp privacy policies

Despite pressure from the Federal Trade Commission, Facebook is unlikely to leave WhatsApp's stricter privacy policies intact, once government regulators approve the $19 billion acquisition, privacy experts say.

Late last week, Jessica Rich, director of the FTC's Bureau of Consumer Protection, sent Facebook a letter, warning the social network that it must abide by the privacy promises WhatsApp made to users of its instant messaging service.

"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," the letter said.

"We want to make clear that, regardless of the acquisition, WhatsApp must continue to honor these promises to consumers."

While the words seem stern, WhatsApp users should not let their guard down and believe nothing will change.

"It's obvious to everyone that Facebook will turn WhatsApp into a mobile marketing machine, integrating data collection, targeting and ad delivery," Jeffrey Chester, executive director for the Center For Digital Democracy, told CSOonline Monday.

"The FTC put both companies on notice that before they can change WhatsApp's data practices, it will have to give its users prior notice and get consent."

In getting that approval, Facebook and WhatsApp will have to "loudly state any plans to change policies, giving users enough notice to take action," Adi Kamdar, a privacy activist with the Electronic Frontier Foundation, said.

"The letter goes even further by encouraging an opt-out mechanism for users who do not agree to such policies," he said. "In other words, they can't simply change their policies in the background without potentially running afoul of the FTC's stick."

WhatsApp sends billions of instant messages a day for its 450 million users worldwide. Facebook announced in February it planned to acquire the company, which claimed to be growing by a 1 million users a day.

Part of WhatsApp's attraction is its stated dislike for sharing users' personal data with advertisers. The service is ad-free and the company says in its privacy policy that it hopes "to keep it that way forever."

However, the company leaves itself some wiggle room. "We have no intention to introduce advertisement into the product, but if we ever do, will update this section," the policy says.

For now, WhatsApp promises not to use the personally identifiable information it has to send commercial or marketing messages without the user's consent. It also promises not to sell or share that information with other companies for commercial or marketing use without prior consent.

If Facebook is to maximize its investment in WhatsApp, it might have to make changes in the user information it collects. Today, WhatsApp does not copy, store or archive the content of messages sent by users. In addition, it does not collect the names, emails, addresses or other contact information from users' mobile address books or contact lists.

The service does collect users' mobile phone numbers and accesses contact lists in order to locate the mobile phone numbers of other WhatsApp users.

Facebook has not disclosed its plans for the service and did not respond to a request for comment Monday.

The FTC letter makes it clear that the commission will scrutinize changes to WhatsApp.

"It sent a strong signal that the FTC is watching--and isn't fooled by the claims of Facebook and WhatsApp founders that their motives are pure," Chester said.

The letter warns Facebook that any changes to WhatsApp's data collection policies could violate an agreement it has with the FTC. In 2011, Facebook settled charges that it deceived users on "numerous occasions" about how it shared their personal information.

Under the settlement, Facebook is barred from making deceptive claims about privacy and is required to get user approval before changing the way it shares their data. The company must also undergo periodic assessments of its privacy practices by independent auditors over the next 20 years.

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