Privacy groups ask regulators to halt Facebook's $19 billion WhatsApp deal

SAN FRANCISCO Fri Mar 7, 2014 2:28am IST

Whatsapp and Facebook icons are seen on a Samsung Galaxy S4 phone in the central Bosnian town of Zenica, February 20, 2014. REUTERS/Dado Ruvic

Whatsapp and Facebook icons are seen on a Samsung Galaxy S4 phone in the central Bosnian town of Zenica, February 20, 2014.

Credit: Reuters/Dado Ruvic

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SAN FRANCISCO (Reuters) - Privacy advocates have asked U.S. regulators to halt Facebook Inc's (FB.O) $19 billion acquisition of messaging service WhatsApp until there is a clearer understanding of how the company intends to use the personal data of WhatsApp's 450 million users.

WhatsApp, a service that allows mobile phone users to send each other messages, has had a longstanding commitment to not collect user data for advertising purposes.

But there's no guarantee that that commitment will hold true once the service becomes part of Facebook, according to the filing to the Federal Trade Commission by the Electronic Privacy Information Center and the Center for Digital Democracy, both non-profit groups.

The complaint asks regulators to investigate the deal "specifically with regard to the ability of Facebook to access WhatsApp's store of user mobile phone numbers and metadata."

Facebook, the world's No.1 social network with 1.2 billion users, generates the majority of its revenue by showing ads that target users by age, gender and other traits.

"As we have said repeatedly, Whatsapp will operate as a separate company and will honor its commitments to privacy and security," Facebook said in a statement in response to the filing. The FTC declined to comment.

Facebook stunned the technology industry last month when it announced its intention to buy the five-year old WhatsApp for $19 billion in cash and stock. WhatsApp does not show ads on its service, charging some of its users a $1 annual fee to use the service.

WhatsApp stores users' mobile phone numbers, but unlike many online services, it does not collect user names, emails, and other contact information.

Despite assurances by WhatsApp and Facebook that the privacy policies will not change, the groups that wrote the FTC filing note that Facebook has in the past amended an acquired-company's privacy policies, such as the Instagram photo-sharing service that Facebook acquired in 2012.

Regulators must require that Facebook "insulate" WhatsApp user information from access by Facebook's data collection practices, reads the complaint.

"WhatsApp users could not reasonably have anticipated that by selecting a pro-privacy messaging service, they would subject their data to Facebook's data collection practices," reads the filing.

(Reporting by Alexei Oreskovic; Editing by Jonathan Oatis)

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