Latin America

WhatsApp Flap Pits Justice Against Privacy

Brazil's judges have the upper hand in setting the country's digital boundaries.

Left in the dark.

Photographer: Chris Ratcliffe/Bloomberg

Tech companies shopping for customers in the instant messaging market have good reason to court Brazil -- 93 million of them, in fact.

That's how many people use the messaging service WhatsApp in this country of 202 million. So when a judge ordered the arrest of parent company Facebook's vice president for Latin America, nervous Brazilians reached for their phones. The executive, Diego Dzodan, was quickly released on appeal, but the ordeal was a reminder of the stakes when global technology services collide with local laws, and tens of millions of citizens brace for the fallout.

The trouble began March 1, when federal police arrested Dzodan on grounds that Facebook had failed to comply with a court order to turn over WhatsApp data, including messages between members of an alleged Brazilian crime ring. Details of the case have not been made public, but Judge Marcel Maia Montalvao's ruling noted that the company had ignored three requests to share documents with police, despite daily fines of up to around $250,000.

Dzodan countered that since WhatsApp doesn't store messages, much less eavesdrop on customers, it couldn't possibly comply -- not to mention that it operates independently of Facebook.

This was WhatsApp's third run-in with the Brazilian courts in the last year. Just in December, another judge ordered the messaging service to shut down for 48 hours after the company failed to turn over client messages to help authorities crack a drug case, although a higher court overturned that ruling. That brief app blackout caused a national outcry and sent bereft clients scrambling for competing services.

The Brazilian court's demands are reasonable enough: If big data can help track dangerous criminals, surely digital providers and legal authorities ought to find a way to cooperate without trampling on customers' privacy. Instead, the search for common ground has given way to a contest between an overreaching state and a nearly untouchable international company -- WhatsApp has no offices in Brazil, leaving Facebook to answer to authorities -- and each is testing the limits in a land where the rules of digital engagement are a litigious work in progress.

In many ways, the battle in Brazil recalls the U.S. Federal Bureau of Investigation's attempts to force Apple to unblock an iPhone found on one of the suspects in the terrorist attack in San Bernardino, California, in December.

Brazil had hoped to avoid such an impasse with a forward-thinking Internet governance law, passed in 2014 after a decade of debate. One of the key concerns: how to hold footloose international corporations accountable to local law enforcement. The solution was to require international Internet service providers to store logs on local clients for six months, in case any legal issues arose in Brazil.

But this was easier said than done. Ever since Edward Snowden exposed how the National Security Agency monitored communications worldwide, including Brazilian President Dilma Rousseff's smartphone, digital providers have begun to encrypt their clients' messages against snoops and hackers -- which, according to WhatsApp, essentially makes it impossible to turn over the data.

Of course, that put WhatsApp on a collision course with the law. And in Brazilian courts, the digital playing field favors the state. "Brazil has a data retention law, but none for protection of individual data," said Claudio Lucena, a Brazilian lawyer specializing in digital information at the Catolica Global School of Law in Lisbon. "That leaves us decades behind Europe and the U.S."

To be fair, most nations are grappling with the same vexing issues of how to draw the boundaries between liberty and law enforcement, and the right to privacy versus the imperative of transparency. The problem is that Brazilians are doing so amid an unprecedented political corruption scandal and the worst recession in a century, which have captured the political conversation and sabotaged all but the most pressing policy initiatives.

That leaves the judiciary arguably with disproportionate clout over conflicts that ought to be hashed out by society, said Andre Correa, a specialist in corporate privacy and transparency at the Getulio Vargas Foundation's law school in Sao Paulo.

So don't expect a truce or even much coherence on the digital battlefield anytime soon. "The longer we take to work out clear rules about digital rights and obligations, the more we'll be prey to the whims of the court," said Lucena. "Multiply this by hundreds of millions of Web users and 16,000 judges, and you've got a potential for chaos."

Now that's something to text about.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.