FTC’s Warning for Facebook-WhatsApp Deal

It was just over two weeks ago when WhatsApp crossed the threshold of 64 billion messages being transmitted in just a 24 hour time frame. This number is based on a total of 20 million sent, 44 million received messages through the WhatsApp app. In December of 2013, the company also reported over 400 million active users.

With those two milestones alone, it comes as no surprise that Facebook would love to jump on the opportunity to scoop up this up and coming company. So they put in an offer. All was good, Facebook even officially acquired the company more than a month before reaching the 64 billion message milestone – but the deal wasn’t technically complete.

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Photo: Nito / Shutterstock

The FTC still had to approve the deal.

Two different consumer groups placed complaints with the FTC (US Federal Trade Commission) and claimed that Facebook may include unfair trade practice. They made the suggestion of blocking the transaction until it was made publically aware as to how the data pertaining to the millions of WhatsApp users would be used. Part of this argument came from Facebook’s acquisition of Instagram, which has seen many privacy policy changes since being acquired.

Of course, Facebook retaliated to this claim by specifying that WhatsApp will stay as its own entity, its own company, and it will follow its own policies.

The CEO also made a public blog post claiming that there is nothing to worry about and that the deal would not have been agreed if the safety of WhatsApp user’s data was at any kind of risk.

Now this brings us to the most recent news. The tentative green light from the FTC.

FTC Gives the Go Ahead

The FTC provided a green light for Facebook to acquire WhatsApp for $19 billion. This put aside the complaints from the two consumer groups and suggests that the FTC is not concerned with the business practices of Facebook in this acquisition.

However, it is important to note that international regulators must also approve the deal before it is officially final.

This Comes With a Warning

The approval letter came with another letter attached. This letter went into detail on potential privacy concerns. Not to say that they are worried of Facebook’s intentions, but such a big deal, with so many users potentially at risk, needs to have all the bases covered.

The most important piece to note from the warning letter from Jessica Rich, who is the FTC’s Bureau of Consumer Protection Director, specified that the WhatsApp CEO promised many things about how data will be stored and used.

Essentially, the CEO made it known that this would all be kept to a minimal, to a much lesser extent than the average Facebook user. As such, the warning clearly states that these user privacy protection policies must stay intact no matter the result of the acquisition.

If WhatsApp is incorrect and the privacy policies in place are not respected, both companies may be in violation of the FTC act.

Another warning made it a requirement for WhatsApp to follow a previous arrangement between Facebook and the FTC, where consumers must be informed and must give consent in order for their details to be shared in ways outside of what’s covered within their privacy settings.

Facebook has announced that they are happy that the FTC has approved the deal and that both Facebook and WhatsApp fully intends on continuing to follow all the specified rules after the acquisition is made.

How WhatsApp Is Going To Revolutionize Mobile Communications

Facebook did not just drop a pretty penny on this company for nothing. It’s not just a social app. It’s a communications platform – a huge one at that, given the sheer amount of active users.

What’s really going to catapult WhatsApp to success is its push-to-talk voice call option. Users can take advantage of Voice over LTE, or VoLTE, which allows for high quality mobile calls with less bandwidth than 3G calling. VoLTE is expected to take over mobile communications completely. Within the next two years, it will become clear as being the next big thing – give it a decade and 3G will be a thing of the past.

This is just one avenue that WhatsApp is attempting to penetrate. Of course, it’s a huge market and becoming that affordable alternative to typical mobile communication options will definitely prove profitable.

Even as it stands, with a basic subscription model, the WhatsApp platform is very profitable and will surely be one of Facebook’s more dependable investments from a cash-on-cash return basis. It may not be bringing in the top dollar that Facebook wants to see on an annual basis, but the sky is the limit as the company continues to grow and explore new technologies.

Interested in learning more about VoLTE technology? Read up on WhatsApp’s VoLTE plans.