One month after Facebook announced its plan to acquire WhatsApp for $19 billion, the Federal Trade Commission (FTC) has given its approval -- under one condition. WhatsApp’s privacy policies must remain the same unless consumers provide their informed consent.
The FTC made its ruling after privacy organizations in the U.S. wrote to the agency with concerns about exactly what Facebook planned to do with WhatsApp’s user data.
Facebook has not had a great record when it comes to protecting user information, as some people have argued that the social exploits data for advertising purposes. As a result, even some of WhatsApp’s users were worried when the acquisition was announced, since WhatsApp has always tried to protect user privacy. Now that the FTC has made it clear that all changes require authorization, there is less potential for exploitation.
Enforcing The Law
“WhatsApp must continue to honor these promises to consumers. Further, if the acquisition is completed and WhatsApp fails to honor these promises, both companies could be in violation of Section 5 of the Federal Trade Commission Act and, potentially, the FTC's order against Facebook," Rich said in the letter.
An Old Agreement
Not only are Facebook and WhatsApp subject to the laws in the FTC Act but they are also subject to an agreement that Facebook reached with the FTC in 2011. The regulatory authority filed a lawsuit against Facebook when it was discovered that the social network had not been upfront about how it was using user data.
At that time, Facebook was directly breaking promises that it had made with its users and was not informing them about policy changes. The two parties eventually agreed that Facebook would have to get approval from users before making changes to its terms of service.
Since WhatsApp will be under Facebook’s control, it must also operate in accordance with the FTC’s requirements. Failure to do so would cause Facebook to be in violation of multiple agreements, and the FTC would have an easy time levying fines or placing other restrictions on the company.