The new privacy policy of Whatsapp is perhaps the biggest change WhatsApp has made in years. The company has stated that it would share more user data with its parent company Facebook, most likely related to the business transactions on WhatsApp, device-level information, and other user activities. The move is related to its bigger ecommerce play and its super app ambitions in the country (1).
It is well known that despite their end-to-end chat encryption, WhatsApp collects an enormous amount of metadata from users. And with the new policy, it would now freely share our data with Facebook as a part of their larger vision to connect Facebook several parts as stated by Facebook boss Mark Zuckerberg in 2019 (2).
What is more worrying is that users who do not accept the new privacy policy amendments, which are coming into effect from February 08, 2020, will no longer access their WhatsApp apps and groups, according to the company’s in-app prompts shown to multiple Indian users.
With the new terms and conditions, WhatsApp would share user transaction data, IP addresses, mobile device information, and other users’ data on how they interacted with businesses with Facebook group companies, including Instagram.
It is worth highlighting that Facebook already collects our device, connection, and location data automatically. The troublesome part is that the company collects our location information even when we have turned off our location settings.
Apart from these, it will also automatically collect device and usage log indicating WhatsApp status, chat groups, and profile photo.
The Analysis
While researching Facebook’s super app ambitions, we found an emerging trend among US tech giants; several seem to be striving to become a super app in countries other than the US, particularly India. Amazon, Google, and Facebook have active super-app like products in our country and other emerging markets worldwide.
Among these big names, Facebook, along with its subsidiary properties, has most publicly announced its ambition to become a super app.
On the ‘about us’ (3) page of The Facebook Company, that’s what it calls itself; we could see its technologies or products. It includes the Facebook app, Messenger, Instagram, WhatsApp, Oculus, Workplace, Portal, and Novi.
What’s absent in the list is Facebook Financial, which is currently led by David Marcus (4), the former PayPal CEO, former Facebook Messenger head, and co-creator of its blockchain-based payment system Libra.
The Facebook Company has a few core properties with it already primed to become super apps. It includes WhatsApp, Messenger, Facebook.com, and Instagram. However, if Facebook wants any of these platforms to become a true super app, it must have payments as its core infrastructure piece.
Appointing Marcus, a seasoned executive, and making payments into a company-wide initiative through Facebook Financial would allow it to have a robust and unified payments experience across all of its apps.
When Facebook acquired WhatsApp for 19 billion USD in 2014, many were shocked. However, Facebook knew what it was doing.
By February 2020, it had more than 2 billion users worldwide and supported over 50 million business app users. No other platform seems to be more fit to become a super app.
In the Indian market, WhatsApp already has super app functionalities and has even become an integral part of our culture.
While it has more global users than WeChat’s 1.2 billion users, it doesn’t have the same stronghold in one particular nation as what WeChat has in China. And with that being said, India seems to be its target.
WhatsApp already counts India among its biggest market, with more than 400 million users. Over 175 people message a WhatsApp Business account globally, and over 40 million people view its business catalog every month, including over 3 million Indian users (5).
It had already planned a peer-to-peer payment functionality for Indian users as far back as 2018 (6). Today, it is gradually rolling out the feature for its massive Indian userbase.
Its WhatsApp Business is also reminiscent of WeChat’s mini-program precursor Official Accounts. Within a year, it had 5 million users after its launch in 2018. WhatsApp has also claimed that the number of businesses using the service had grown to 50 million globally, and 15 million were from India (7).
It is worth highlighting that India is the world’s second most unbacked nation, with 191 million adults without a bank account. Though, with a percentage of the total population, only about 11% is not too high. The growth in India’s banked population in part is because of the Government’s drastic measures to decrease the country’s Reliance on cash via demonetization (8).
Additionally, Facebook had invested 5.7 billion USD into our Jio Platforms to gain an even great foothold in our country. Jio Platform is a digital services platform and telco subsidiary of India’s largest company Reliance Industries.
Notably, before WhatsApp took off in India, Jio had its super app ambitions. But we would like to point out that, in a way, Facebook does owe a debt of gratitude to Jio since many of Facebook’s Indian userbase could only access Facebook and WhatsApp because of the Jio’s wireless network.
Two companies are now working in a joint effort on new offerings with Reliance e-commerce venture JioMart selling items via stores built on top of WhatsApp (9).
A Business Boon
There is no doubt that in the Indian market, where WhatsApp is largely dominated, standalone businesses build their companies’ messaging service.
The new policy mainly targets business interactions, transactions, and other business-related features. It said that it would allow Facebook and WhatsApp to support third-party service providers better and offer advanced features like analytics and more. The move is part of WhatsApp’s plans to become an ecommerce platform of sorts for small vendors and digital service providers.
In the last month of 2020, WhatsApp rolled out ‘carts’ to make online shopping effortless for consumers via purchasing multiple items from a seller. As with any other ecommerce experience, it also lets users add items to the cart and send an order request to sellers (10).
At that time, WhatsApp stated that it is rapidly becoming a store counter to discuss products and sales coordination. Catalogs have allowed consumers to quickly glance at what’s available and help businesses organize their chats around particular products. It aims to make buying and selling even more effortless, with more and more happening via chats.
It also claimed to aid content personalization and displaying relevant ads across other Facebook’s properties. The company also plans to interlink these features with Facebook Pay globally for service correspondence.
“As part of WhatsApp’s business vision in October 2020, to enable small businesses better, we are updating our terms of service and privacy policy as we work to make WhatsApp a great way to get answers or help from a business.”
– Spokesperson, Whatsapp (11).
Users shopping via its platform would mean a chance for Whatsapp to roll up payments via its newly-launched payment feature WhatsApp Pay. WhatsApp Business already expedites the social commerce model for plural Indian startups, aiming to leverage community-driven reselling models to augment sales.
Numerous Indian ecommerce startups are using WhatsApp’s massive reach to accomplish their social commerce ambitions. For instance, online grocery startup Deal share based in Jaipur is reported to have built over 100 WhatsApp groups with more than 15,000 customers to notify them about deals and offers. Other social commerce startups such as Meesho, a Bengaluru-based startup, rely profoundly on WhatsApp to power their reselling model (12).
The scenario is very much like how companies in China are building their businesses through WeChat distribution.
As WhatsApp continues to build more payment features into the app, these businesses also get the potential to be stronger. Simultaneously, as more business-focused features are added to the platform, it runs the risk of being salvaged by native WhatsApp features.
WhatsApp’s strong case as a super app looks like WeChat, which started as a messaging app and gained ubiquity across big markets and added payments and commerce functionality. However, the cynical case for it is that it is a part of Facebook and may not chart its course the way WeChat did.
What’s Ahead?
Down the road, WhatsApp would need to make critical choices. Additionally, Facebook’s culture is also not entirely friendly to third parties, and it also relies heavily on advertising.
The openness and the ability to allow anyone to build on top are the essences of WeChat’s success. Facebook also needs to be okay with winning alongside other firms with niche functions like ride-sharing and other functions.
Notably, Tencent used its advantage in Chine to invest and acquire significant ownership shares in firms that would support Tier 1 partners. However, it is one aspect that makes getting super app dominance harder in the west.
Such opportunities are not available to aspiring super apps such as Facebook in the US. Moreover, given the US market’s maturity, several companies that Facebook may want to partner with, such as Netflix or Amazon, are older than the firm itself.
However, if we look at India, Facebook’s investments make a lot of sense. It has also made us keep an eye out for more investments from Facebook in the Indian market.
Another important fact to bring up is the list of countries with the highers internet users numbers (13).
Since Facebook has no real entry point in China, India cuts the mustard.
Raising Prickles
The US firm’s move is raising prickles among antitrust and cybersecurity advocates and privacy experts who have long warned against data pooling among giant tech companies.
“The recent changes are an attempt to monetize users’ private data without GIVING them a choice. It is a wake-up call for the Government to come up with a framework to regulate intermediaries and have a dedicated data privacy law.” – Pavan Duggal, Cyberlaw Expert (14).
The policy will allow WhatsApp and Facebook to share user information with third-party service providers and businesses that transact on their platforms.
The company stated that several businesses rely on WhatsApp to communicate with their clients and consumers on their blog spot. The company works with enterprises that use Facebook or third-parties to store and better manage their communications with them on WhatsApp.
It requires users’ consent to share transaction data, mobile device information, IP address, and data on how they interact with businesses with Facebook and group firms.
In its blogpost, WhatsApp stated that sharing data with its parent company would help personalization of content and the display of relevant ads across its multiple social platforms. Moreover, it would also enable users to interlink services like using Facebook Pay account to pay for things on its messaging platform.
According to Abir Roy, lawyer and founder of Sarvada Legal (15), the new policy also raises antitrust issues apart from privacy issues. He added that the moment the company would get an insight into a user’s buying behavior, they could do targeted advertising on Facebook.
It is worth highlighting that India accounts for more than 400 million of the 2 billion WhatsApp users worldwide. It is the first nation for WhatsApp to launch the payment. The Indian Government has permitted it to go live with 20 million users so far.
India has more than 310 million users on Facebook, as per the data platform Statista (16), the largest user base for its social networking platform.
Previously, Whatsapp had stated that it automatically collects usage and log information, including status, profile photo, and group information. It also automatically collects device, connection, and location information.
It has cautioned users to remember that the content shared with a business on WhatsApp could also be visible to several people in that business. Moreover, some businesses may also be working with third-party service providers, including Facebook, to manage their communication with their consumers.
The blogpost also guided users to review the business privacy policy to understand how their data is processed. It stated that it needs businesses to act according to the law when offering any data, including Facebook and other third-party service providers.
Data sharing between WhatsApp and its parent Facebook has long attracted regulators’ attention globally. In 2018, the United Kingdom’s ICO, Information Commissioner Office, got WhatsApp to sign an undertaking in which it has committed publicly not to share users’ personal information with Facebook in the future until the company can do it in a way that is compliant with its GDPR, General Data Protection Regulation.
In 2017, the French data protection agency had stated that WhatsApp doesn’t have a legal basis to share users’ data under French law for ‘business intelligence’ purposes. It added that WhatsApp had violated its CNIL and had not properly obtained users’ consent to start sharing their phone numbers with Facebook.
In the present scenario, it seems like Facebook is increasingly looking at our nation as a ‘vanguard’ for product innovations and investments.
Notably, India is the first nation where Facebook had launched Reels on Instagram and Watch on Facebook.
WhatsApp aims to digitize and scale Indian small and micro-ecosystems to grow its digital payment business and provide access to business services via its software. It is also partnering with edtech and agritech business and launching pilots of selling pensions and micro-insurance in India.
End of So-Called Privacy on WhatsApp
According to digital rights activists, the move will dilute users’ privacy and maximize data collection.
WhatsApp has given its users a ‘take it or leave it’ option, which indicates that it is the end of so-called privacy on the platform, says Jiten Jain, a cybersecurity expert (17).
He added that according to the updated terms, WhatsApp would share data with businesses and, therefore, also with government and law enforcement agencies.
It would soon start resembling Facebook who shares data with governments on request. It seems like WhatsApp would start doing the same.
With the absence of privacy law in India, users would have no recourse if their data is shared with the Government and its agencies.
“Facebook is getting forced consent from users by asking them to click agree or lose the service. Nations like France and the UK have forbidden Facebook from sharing data beyond WhatsApp in 2018. The constant dithering and incoherent approach of Indian legislators with the Data Protection Law have left Indians unprotected.”
– Mishi Choudhary, Technology lawyer (18).
The instant messaging platform has started informing its Indian users of the updated service terms via an in-app pop-up notification. Users were given an option to accept the updates via clicking on the ‘agree’ tap that appeared with the notification. As per the pop-up, users would have to accept the terms or lose their service from February 08, 2021 (19).
How to Delete WhatsApp Account?
According to the new privacy policy, if someone only deletes the app from their device without using the in-app delete my account feature, then users’ data will remain stored with the platform.
The policy also highlights that if a user deletes his account, it won’t affect their information about the groups they have created or the information others have since its copy of the message that the user has sent (20).
Hence, only deleting the app from our phones alone is not enough.
Author’s Note
WhatsApp has made cleaver in its message that they only want users who are willing to entertain their new privacy policy terms. Hence, we don’t see any points in complaining about it.
“By tapping agree, you accept the new terms and privacy policy; you’ll need to accept these updates to continue using WhatsApp. You can also visit the Help Centre if you would prefer to delete your account and would like more information,”
the notification read.
Users can either accept it and lose their privacy or close the account. It’s all up to their choice.
Regardless, we see it as a matter of grave concern. And as a time for India to delete WhatsApp to shift to home-grown social media platforms instead.
Meanwhile, the Indian Government needs to develop a robust data protection law to protect its citizen’s data.
We believe that the new terms of service and privacy policy are pure hooliganism by Facebook, and we hope to see #GoodbyeWhatsApp trending soon and the final rites to be performed on February 08.
