What’s up with WhatsApp? – Dina Shiloh

28 08 2016

WhatsAppOver a billion people around the world use the app WhatsApp, which allows users to send messages, make telephone calls and send videos and photographs over internet connections.  

In 2009, when most providers charged its users per text message and call, WhatsApp was radical. Free calls and texts: this was unheard of. And not only is it free, since November 2014 the messages have been individually encrypted. WhatsApp claims that even they cannot decode them. No fear of the NSA or GCHQ snooping on you: WhatsApp is, they say, impenetrable.  Critics argued that the security services need to be able to access messages, but to date Whatsapp has stood firm.

The encryption has also meant that users can’t be targeted by ads.

This is very different from other messaging services:  users of Gmail, for example, are now aware that Google uses the content in your messages to target ads at you. Gmail even analyses the data in emails sent to Gmail users from non Gmail account holders to target ads (see my Inforrm post in May 2014).

WhatsApp services are provided without pop up ads or pesky banners. Its founders, two ex- Yahoo employees, were even said to have a mantra taped to their desks: “no ads, no games, no gimmicks.”

But maybe it was too good to be true. In February 2014 WhatsApp was purchased by Facebook for the seemingly extraordinary sum of $21.8 billion, its biggest acquisition to date. To put this in perspective: Facebook bought the very popular app Instagram in 2012 for $1 billion.  If it seems expensive, there are good reasons:  WhatsApp has younger users than Facebook, and is used by many people who don’t have Facebook accounts, all over the world. Clearly, Facebook would find a way to monetise the WhatsApp data.

WhatsApp told its users that nothing would change: their data was safe. Pundits who have seen similar acquisitions lead to seismic shifts in start-ups waited patiently. Their patience was rewarded on 25 August 2016, when WhatsApp announced changes to its privacy settings. WhatsApp, in a blog, framed this as a positive step: “we want to explore ways for you to communicate with businesses that matter to you too.” WhatsApp also explained that Facebook users who had WhatsApp would benefit by getting better “friend suggestions”, and “more relevant ads.”

WhatsApp does allow users to opt out of the new terms and conditions but the vast majority of WhatsApp users will agree without reviewing them in any detail.

So what do the new privacy settings mean? Essentially, your phone number, and the numbers of those you connect to via WhatsApp, will now be shared with Facebook. Facebook will then do what it needs to do to make money from this data.

Facebook say they will use the data, for example, to suggest that you connect with contacts on Facebook if you are only on WhatsApp with them. Facebook will also be able to send targeted ads to WhatsApp users on their Facebook pages. WhatsApp says it won’t sell or share your phone number with advertisers. However, by providing your data to Facebook, and its other companies, including information on who you have contacted on WhatsApp (such as banks, shops and airlines)  arguably this is irrelevant: you can still be targeted.

Whatsapp’s USP has been that it is encrypted and that it has no ads. WhatsApp assured its users that nothing would change and that it would protect their privacy when it was bought by Facebook. It appears that assurance has been compromised.

Facebook CEO Mark Zuckerberg said in a press conference in 2014 that Facebook would wait for WhatsApp to have one billion users before monetising the app. The monetisation has now started- but it is not clear how it will end.

Dina Shiloh is a partner at Gallant Maxwell, specialising in defamation, privacy and data protection. 


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