A week after privacy advocates have asked U.S. regulators to halt Facebook Inc’s $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; reports are saying that the deal might face a detailed scrutiny by the Indian fair trade regulator CCI. As both Facebook and WhatsApp have massive presence in India.
Facebook, which is the most popular social networking site in the country with more than 93 million active users had acquired the world’s most popular messaging app WhatsApp in the month of February for a whopping price tag of $19 billion. WhatsApp which is aiming for a billion users by the end of 2014 from India, has more than 40 million active users at present.
According to the rule book, all mergers and acquisition deals involving companies having India presence, have to get approval from the Competition Commission of India (CCI). However CCI is yet to receive an application seeking approval for the deal from both Facebook and WhatsApp but both would face an elaborate scrutiny.
The CCI concerns come right after privacy groups raised concerns about the deal with regulators in US.
The messaging app WhatsApp functions on top of your mobile contact book. While WhatsApp has a longstanding commitment to not collect user data for advertising purposes, what if after this deal Facebook collects data for advertising purposes.
A complaint filed by two non-profit groups, Federal Trade Commission by the Electronic Privacy Information Center and the Center for Digital Democracy has asked 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.”
Addressing the concerns Facebook has stated again that Whatsapp will operate as a separate company and it will honor its commitments to privacy and security. However, there’s no guarantee that commitment will hold true once the service becomes part of Facebook as we have seen such commitments being broken in the past by Facebook with regards to Instagram.
In fact last week Facebook tied up with one of the largest advertising groups in the world, Omnicom for a $100 billion where Instagram’s 150 million active users will start seeing ads in their streams from brands that work with Omnicom’s media and creative agencies.