FTC Gives The Go-Ahead To Facebook Inc (FB), WhatsApp Merger


When Facebook Inc (NASDAQ:FB) announced its plans to acquire the popular messaging app Whatsapp in February, many in the tech world were shocked by the $19 billion price that Facebook was willing to spend in the largest acquisition in company history. At the same time, privacy groups were up in arms given the belief that Facebook Inc (NASDAQ:FB) would collect the (limited) user data that WhatsApp collects in order to use it for targeted ads.

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FTC Gives The Go-Ahead To Facebook Inc (FB), WhatsApp Merger

FTC issues warning to Facebook, WhatsApp along with approval

Facebook Inc (NASDAQ:FB) CEO Mark Zuckerberg responded quickly to these concerns and was quoted as saying, “We are absolutely not going to change plans around WhatsApp and the way it uses user data. WhatsApp is going to operate completely autonomously. They might use people and infrastructure to grow, but the vision is to keep the service exactly the same. They do not keep the content you send, and we’re not going to change that.”

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That, however, was not enough for a few groups that lodged complaints with the Federal Trade Commission.

In approving the deal in the United States today, (the deal is still pending in Europe) the FTC sent a strongly-worded letter to both companies reminding them to honor their commitments made with regard to privacy and effectively said to both, “We’re watching you.”

“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 ” wrote Jessica Rich, director of the consumer bureau.

The companies respond

“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.

It’s a touch ironic that the merger has drawn the ire of privacy advocates as WhatsApp requires little more than a mobile number to get started. It doesn’t require a user’s name, email, or other information to use the service.

“Respect for your privacy is coded into our DNA, and we built WhatsApp around the goal of knowing as little about you as possible,” Koum said in a post on WhatsApp’s blog titled “Setting the record straight.”

The FTC also sent a letter to EPIC, one of the privacy groups that has concerns about the merger. “The FTC staff will continue to monitor the companies’ practices to ensure that Facebook Inc (NASDAQ:FB) and WhatsApp honor the promises they have made to those users,” the letter said.

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While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. <i>To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com</i>
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