FTC Says Facebook, WhatsApp Must Honor Consumer Privacy

The Federal Trade Commission has a message for Facebook Inc. and WhatsApp Inc.: Privacy matters.

The agency today issued a letter to the two companies saying that mobile-messaging application WhatsApp “must continue to honor” privacy promises to consumers. When Facebook said it was acquiring WhatsApp in February, the companies said they planned to continue with WhatsApp’s policies of not collecting any personally identifiable information of users or their contacts. Facebook said the $19 billion deal, which is pending completion, was approved by the FTC.

“As you know, the FTC has brought many cases alleging that the failure to keep promises made about privacy constitutes a deceptive practice,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection wrote in today’s letter addressed to Facebook Chief Privacy Officer Erin Egan and WhatsApp General Counsel Anne Hoge,

Facebook has long grappled with the issue of user privacy given the enormous amounts of data it has on its more than 1.2 billion members. In 2011, the Menlo Park, California-based company settled FTC charges that it deceived consumers by making their information public and shareable even when it told people that data was private. Under that agreement, Facebook must get customer’s “affirmative consent” before making any changes that override privacy settings, the agency said.

Jodi Seth, a spokeswoman for Facebook, said of the FTC letter today: “We’re pleased the FTC has completed its review and cleared our acquisition of WhatsApp.”

Privacy Complaints

The Electronic Privacy Information Center and Center for Digital Democracy filed a complaint with the FTC on March 6, saying the purchase may be an unfair trade practice because users of the messaging service had an expectation that their data wouldn’t be collected for advertising purposes.

WhatsApp Chief Executive Officer Jan Koum has repeatedly said nothing will change with the company’s privacy practices.

“If partnering with Facebook meant that we had to change our values, we wouldn’t have done it,” Koum wrote on the company’s blog last month. “Instead, we are forming a partnership that would allow us to continue operating independently and autonomously.”

The shares of Facebook fell 5.2 percent to $59.16 at the close in New York, leaving them up 8.3 percent so far this year.