Case #6. WhatsApp Data-Sharing Plan with Facebook

EU looking at privacy issues surrounding WhatsApp plan to share user information

By

Sam Schechner and Yoree Koh Aug. 29, 2016  Wall Street Journal

European privacy regulators are investigating messaging service WhatsApp’s plan to share user
information including phone numbers with its parent, Facebook Inc., adding to pressure on both
sides of the Atlantic over the social media firm’s privacy practices.

A European Union body representing the bloc’s 28 national data-protection authorities said Monday
that its members were following “with great vigilance” changes to WhatsApp’s privacy policy last
week. The new policy disclosed the plan to share data with Facebook, while giving only existing
WhatsApp users the ability to opt out of part of the data-sharing, setting off complaints from
privacy activists in the U.S. and Europe.

“What’s at stake is individual control of one’s data when they are combined by internet giants,”
the group, called the Article 29 Working Party, said in an emailed statement.

Britain’s privacy regulator last week that it was also planning to look into the issue, saying that
some users “may be concerned by the lack of control.”

Consumer privacy advocates Electronic Privacy Information Center and the Center for Digital
Democracy in the U.S. on Monday filed a complaint with the U.S. Federal Trade Commission, alleging
that the change represents an about-face on WhatsApp’s previous promise to consumers that “nothing
would change” when the social network acquired the messaging startup in 2014.

The Electronic Privacy Information Center and the Center for Digital Democracy complaint filed with
the FTC charges that the proposed changes to use WhatsApp user data for “marketing practices”
constitutes “unfair and deceptive trade practices.”

WhatsApp said it “complies with applicable laws,” adding that “we look forward to answering any
questions regulators or other stakeholders have about this update.”

The pushback from European regulators opens a new front in Facebook’s privacy battles. Germany’s
Federal Cartel Office earlier this year said it is investigating whether Facebook Inc. abuses its
dominance as a social network to harvest personal information. France’s privacy watchdog has
threatened to fine Facebook Inc. if it doesn’t change how it handles data about its users.

Facebook has said it complies with European privacy laws and has won appeals of privacy cases
against it in Belgium and Brussels in recent months as well.

Last week’s change in WhatsApp’s privacy policy struck a chord because the service has long touted
its privacy credentials.

Under the new WhatsApp privacy policy, existing users have 30 days to agree to the new sharing, but
can as part of that process opt out of letting Facebook use the data for marketing purposes. The
complaint alleges that that requirement goes against a 2012 FTC consent order that demands the
company use an “opt-in” process when changing its privacy policy.

WhatsApp disputed the characterization, saying that it both asks for content from all users, and
offers “industry leading choice to existing users over how their data is used.”

Questions:

1.      What property rights conflicts are raised in this case:

Show conflicts in this form:

___________right to __________

versus

___________right to__________

2.      Referring where appropriate to the rights issues, what WhatsApp’s responsibility to its
users?


3.      If you were WhatsApp, what would be your response to Electronic Privacy Information Center
and the Center for Digital Democracy complaint filed with the FTC charges that the proposed changes
to use WhatsApp user data for “marketing practices” constitutes “unfair and deceptive trade
practices.”


4.      Would there be a benefit to WhatsApp of trying to sit down with Electronic Privacy
Information Center and the Center for Digital Democracy to develop a policy both the NGOs and
WhatsApp could agree on, or is the adversarial nature of their relationship inevitable?


Maximum length  300 words