What's Up With Facebook's Acquisition of WhatsApp? - Technologist
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What's Up With Facebook's Acquisition of WhatsApp?

FindLaw columnist Eric Sinrod writes regularly in this section on legal developments surrounding technology and the Internet.

WhatsApp, a messaging service that is often used for international texting and other services, is about to be gobbled up by Facebook, right?

Well, that is Facebook's plan. Indeed, Facebook intends to fork over a hefty $19 billion to acquire WhatsApp. However, that is not the end of the story.

Privacy Groups Try to Block WhatsApp Deal

The Federal Trade Commission (FTC) has been contacted by privacy advocates -- the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD) -- in an effort to block Facebook's acquisition of WhatsApp, according to Reuters.

Why? Privacy advocates are concerned that there has not been sufficient transparency in terms of how Facebook plans to utilize the personal information of approximately 450 million users of WhatsApp.

WhatsApp previously assured its users that it would not use their personal information for advertising-related purposes. But EPIC and CDD are anxious that the personal information collected as part of this regime might be treated differently once it's in Facebook's hands.

Should WhatsApp Users Be Worried?

Facebook has more than 1 billion users and does indeed derive revenue from advertisements that focus on demographics like gender, age, and other personal characteristics. While Facebook has used its own users' personal information for ads, it is not clear yet, according to privacy advocates, whether Facebook would take that approach with WhatsApp users -- who were promised a different treatment of their data.

In response to the FTC issues -- which are unlikely to be resolved any time soon -- Facebook has said that WhatsApp will remain a separate company even after the acquisition, and that the messaging company will continue to honor its prior privacy guarantees.

If that is true, one would think that there should not be a problem. But the privacy advocates argue that Facebook previously has amended privacy policies post-acquisition, as supposedly happened after it acquired Instagram.

Stay tuned as we see whether the potential acquisition of WhatsApp by Facebook sparks an inquiry by the FTC, as requested by the privacy advocates.

Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP, where he focuses on litigation matters of various types, including information technology and intellectual property disputes. You can read his professional biography here. To receive a weekly email link to Mr. Sinrod's columns, please email him at ejsinrod@duanemorris.com with Subscribe in the Subject line. This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.

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