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Privacy Groups Ask FTC To Investigate Facebook's WhatsApp Acquisition

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Did anybody think that Facebook’s (NASDAQ: FB) recent acquisition announcement wouldn’t ruffle feathers?

When Facebook says it’s going to spend $19 billion on a mobile messaging company with 450 million active users, everybody from privacy rights groups to contingents of stockholders are likely to make some legal noise. Add to that a government regulator or two and what you have is, well, exactly what has happened.

The most immediate challenge involves privacy concerns. The Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy have asked the US Federal Trade Commission to take a close look at Facebook’s proposed acquisition of mobile messaging company, WhatsApp.

Facebook's Privacy Problems

According to a press release posted on epic.org, the group is concerned because, “Facebook regularly incorporates data from companies it has acquired.” including messages and posts that the original author had not made public or had deleted.

Related: Facebook Announces $16B Cash & Stock Merger With WhatsApp

"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," EPIC said.

Facebook is under a 20-year consent degree from the FTC requiring it to protect user privacy and comply with the US-EU Safe Harbor guidelines.

The complaint pointed out that WhatsApp currently has good data privacy policies, but when Facebook takes over that could change.

Facebook announced on February 19 that it had entered into an agreement to acquire WhatsApp for $16 billion in cash and stock and an additional $3 billion in stock for WhatsApp employees, making the total deal worth about $19 billion. Though the privacy groups are the first to act, critics have come out against the deal on many fronts, including Wall Street investors that believe Facebook overpaid for the company; others believe the company is gaining a near monopoly on mobile messaging that could be harmful for users and the overall market.

An FTC investigation based on industry watchdog reports isn’t unheard of. According to EPIC, the FTC has investigated Google Buzz, Microsoft Passport, and changes in Facebook privacy settings as a result of complaints filed by EPIC. Neither Facebook nor the FTC has commented on the industry groups’ newest complaint.

Disclosure: At the time of this writing, Tim Parker had no position in the companies mentioned.

Posted-In: EPIC Facebook FTC privacyNews Legal M&A Tech Best of Benzinga

 

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