FTC Officially Approves Facebook’s Acquisition Of WhatsApp, With Stern Warning


FTCBuilding650As previously speculated, the Federal Trade Commission approved Facebook’s $ 19 billion acquisition of cross-platform messaging service WhatsApp, stressing that WhatsApp must honor its commitment to maintain its pre-Facebook privacy practices.

FTC Bureau of Consumer Protection Director Jessica Rich said in a letter to the two companies:

We want to make clear that, regardless of the acquisition, WhatsApp must continue to honor these promises to consumers. Further, if the acquisition is completed and WhatsApp fails to honor these promises, both companies could be in violation of Section 5 of the Federal Trade Commission Act and, potentially, the FTC’s order against Facebook.

The order against Facebook refers to a settlement the social network reached with the commission in November 2011, in which Facebook agreed to several conditions in response to FTC allegations that it failed to keep its users’ information private.

Rich’s letter to Facebook and WhatsApp stressed that any changes to how the messaging application handles user data must be approved by its user base, and users must be given the opportunity to opt out of future changes along those lines.

The acquisition faced some flak at the FTC, as the Electronic Privacy Information Center and the Center for Digital Democracy filed a complaint last month, alleging that the privacy of current WhatsApp users will be affected by Facebook’s use of their information.

The two privacy groups also filed a rebuttal with the FTC later that month to a blog post by WhatsApp Co-Founder and CEO Jan Koum, defending the merger.

The CDD responded to Thursday’s announcement with the following statement:

We believe that despite claims that Facebook would preserve WhatsApp’s more privacy-friendly approach, the ultimate plan was to expand its mobile data-collection practices and fully integrate it into Facebook. Facebook’s future depends on its ability to successfully grow its mobile advertising, commerce, and payment applications. It did not spend $ 19 billion without planning to reap huge financial rewards by turning WhatsApp into an effective monetization machine for Facebook. The FTC is to be commended for sending a very strong signal that it will hold Facebook and WhatsApp accountable for their promises. The commission’s action has likely spoiled, for now, the plans Facebook has developed to turn its $ 19 billion shopping spree into even more digital gold for itself.

Readers: Should the FTC have approved the deal?