Facebook Inc (FB): FTC approves of $19B WhatsApp acquisition

Posted Apr 10, 2014

The Federal Trade Commission (FTC) has approved of the $19 billion acquisition of WhatsApp by Facebook Inc (NASDAQ:FB). However, the FTC warned that WhatsApp will have to keep its pre-Facebook level of privacy in place, according to InsideFacebook.

FTC Bureau Director Jessica Rich said that Facebook will have to receive affirmative consent before making any changes to how Facebook uses data that is already collected from WhatsApp users. Facebook and WhatsApp may not misrepresent their efforts in maintaining the privacy and security of data.

Here is what Rich wrote in the letter:

Before changing WhatsApp?s privacy practices in connection with, or following, any acquisition, you must take steps to ensure that you are not in violation of the law or the FTC?s order. First, if you choose to use data collected by WhatsApp in a manner that is materially inconsistent with the promises WhatsApp made at the time of collection, you must obtain consumers? affirmative consent before doing so. Second, you must not misrepresent in any manner the extent to which you maintain, or plan to maintain, the privacy or security of WhatsApp user data. Failure to take these steps could constitute a violation of Section 5 and/or the FTC?s order against Facebook. Finally, if you choose to change how you collect, use, and share newly-collected WhatsApp data, we recommend that you offer consumers an opportunity to opt out of such changes or, at least, that you make clear to consumers that they have an opportunity to stop using the WhatsApp service.

Hundreds of millions of users have entrusted their personal information to WhatsApp. 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.