The FTC's Bureau of Consumer Protection, in a letter to the two
companies on Thursday, said WhatsApp must adhere to its current
privacy practices after the merger, including a promise not to use
WhatsApp users' personal data for targeted ads.
"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 letter from Jessica Rich, director of the
consumer bureau, read.
The letter did not address the status of the government's review of
the merger on antitrust grounds. FTC spokesman Jay Mayfield said the
agency does not comment on investigations.
But a Facebook spokeswoman said that the deal has been approved in
the United States, though it has not yet been approved in Europe.
"We're pleased the FTC has completed its review and cleared our
acquisition of WhatsApp. Naturally, both companies will continue to
comply with all applicable laws after the transaction closes,"
Facebook said in a statement.
The move brings Facebook, the world's No. 1 online social network,
closer to completing the largest deal in its 10-year history, which
will give Facebook an important asset in the fast-growing mobile
WhatsApp, which allows mobile phone users to send each other
messages, has had a longstanding commitment to not collect user data
for advertising purposes. WhatsApp stores users' mobile phone
numbers, but unlike many online services, it does not collect user
names, emails and other contact information.
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Some privacy advocacy groups are worried that that commitment could
be scrapped after WhatsApp becomes part of Facebook, which generates
the majority of its revenue by showing ads that target users by age,
gender and other traits.
In the letter to Facebook and WhatsApp, the FTC's Rich said the
companies must obtain user consent if they use any of the data
collected by WhatsApp in different ways than they presently do.
Facebook is required to get user consent for certain privacy changes
as part of a 2011 settlement of federal charges that it deceived
consumers and forced them to share more personal information than
"The FTC staff will continue to monitor the companies' practices to
ensure that Facebook and WhatsApp honor the promises they have made
to those users," the letter said.
(Reporting by Alexei Oreskovic; editing by Leslie Adler)
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