By Sebastian Herrera
WhatsApp is delaying a controversial update to its privacy
policy following backlash from users over how it would share data
with Facebook Inc., which owns the popular messaging service.
The app said its roughly two billion users would have until May
15 to review and accept the new policy, otherwise it will
eventually stop working for them. The change was previously set to
kick in on Feb. 8.
"We've heard from so many people how much confusion there is
around our recent update," a WhatsApp spokesman said. "There's been
a lot of misinformation causing concern, and we want to help
everyone understand our principles and the facts."
WhatsApp said the new policy isn't geared to expanding its
ability to share data with Facebook but rather to allowing
businesses that interact with customers on the app to store those
conversations on Facebook servers. The move is a key step in
Facebook's plan to generate revenue with WhatsApp after years of
struggling to do so. Businesses will also be able to store user
shopping activity on the servers.
User confusion and resistance sowed by the new policy point to
the difficulty the service faces in advancing on a
profit-generating path. WhatsApp remains a market leader in
messaging, but competition among encrypted messaging platforms is
intensifying with privacy concerns growing as a major consideration
"A lot of folks didn't make the connection that WhatsApp was
owned by Facebook, so being more forthcoming in that relationship
was really a strike against WhatsApp," said Ashkan Soltani, a
former technologist for the Federal Trade Commission. "It has
become important to Facebook that the current model of social media
is risky with content moderation and privacy law. So they are
pushing to find additional ways to monetize."
Some users expressed uncertainty last week about the new policy,
questioning whether Facebook would gain access to messages or other
information they believed to be private. Memes depicting WhatsApp
as an open network spread quickly through social media. A tweet by
Tesla Inc.'s Elon Musk urging his followers to use messaging app
Signal generated more than 59,000 retweets.
WhatsApp has faced substantial backlash in Turkey, with the
government telling its citizens to drop the service and use Turkish
messaging apps such as BiP. WhatsApp said it is sending users in
Turkey virtual cards outlining its privacy protections.
The company said it plans to remind all its users that their
messages are guarded by end-to-end encryption and that neither
WhatsApp nor Facebook can see the private messages, keep logs of
whom users are calling or messaging, or see a shared location.
WhatsApp also doesn't give Facebook access to users' contacts.
Some data is already shared between the two platforms. Facebook
is able to see which phone numbers are being used in WhatsApp, how
often the app is opened by users, and the name of their mobile
While WhatsApp this week sought to clarify the policy and offer
assurances about privacy, users have begun to look elsewhere.
"It seems like Facebook is gradually bringing down the walls
between you and your data," said Jeremiah Gassensmith, an associate
professor of chemistry and biochemistry at the University of Texas
at Dallas who decided to drop WhatsApp after the privacy overhaul.
He is now using Signal.
WhatsApp downloads across Apple and Google's app stores
decreased by about 17% in the week after its policy announcement
compared with the week before, according to app analytics firm
Sensor Tower Inc. During the same period, downloads of Signal
increased more than 60 times and downloads of Telegram, another
service, more than doubled, according to Sensor Tower.
A steady drift away from WhatsApp could hamper Facebook's plans
to make money from the service's extensive user base, analysts say.
High-profile data hacks at major companies and government agencies
in recent years have heightened consumers' concerns about privacy,
potentially giving an edge to messaging services that don't have
Like WhatsApp, Signal and Telegram offer so-called end-to-end
encryption on messages, though Telegram's encryption isn't a
default setting. WhatsApp gives an option to back up messages to
iCloud, meaning messages could potentially be accessed by Apple.
Apple Inc.'s iMessage doesn't generate revenue from the service,
which is generally viewed as a way to bolster customer loyalty to
the company's products. Signal, a nonprofit funded largely by
WhatsApp co-founder and former Facebook executive Brian Acton, has
no profit-generating model.
While sustained demand for rival messaging platforms threatens
Facebook, increased demand could also test the reliability of those
services -- which are dwarfed by WhatsApp. The surge to Signal
caused the app to temporarily crash this month, highlighting its
relatively small capabilities. Some Signal users reported the app
crashing again on Friday.
"It is a balancing act for Facebook," said Rishi Jaluria, an
analyst for D.A. Davidson & Co. "They have to figure out how to
monetize [WhatsApp] without losing the whole thing. People
recognize that privacy really matters, and there are worries about
how much data these big tech companies are gathering from us."
Facebook has been exploring ways to make money from WhatsApp
since its $22 billion purchase of the app in 2014. The company last
year backed away from a controversial plan to push its core
advertising business on WhatsApp users.
The messaging service is creating options for businesses to
market their products through catalogs on the app and through
Facebook's shops and checkout carts. WhatsApp, which charges
businesses for certain types of customer interactions, would profit
from merchants using those tools.
In the U.S., WhatsApp is largely used for interpersonal
communication, whereas users in developing nations -- which make up
the majority of its users -- have turned to the service for
commerce and customer service. The company has said more than 175
million people message WhatsApp business accounts each day.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com
(END) Dow Jones Newswires
January 15, 2021 18:01 ET (23:01 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.