WhatsApp is not playing the game smart
WhatsApp has actually been doing this since 2016, but the intention was that the mother company would also have access to the payment and transaction behavior of WhatsApp users.
This platform is very popular and attracts millions upon millions of active users. But commercially speaking, that hardly helps. It had to change, the top management decided. In 2014, Facebook bought WhatsApp for the small sum of $19 billion, but the acquisition has not paid off since; much to the chagrin of the top of Facebook.
The solution seemed to be to adjust Whatsapp's business model. The user's data would be offered to companies, who could, in turn, use that data to make offers and advertise to users.
WhatsApp had to become an online shopping platform. Users who did not agree had to be aware that their account would in fact cease to exist.
On paper, there is a world to be won for Facebook and WhatsApp. In 2020, WhatsApp had 2 billion active users. If all those users generated the same amount of revenue as Facebook's users, it would have brought the company about $16 billion in additional revenue in Q4 2020.
The announcement of WhatsApp's plans caused a lot of commotion and provoked a lot of negative reactions. As recently as 2014, Facebook had promised that WhatsApp data would not end up with Facebook. That had already turned out to be an empty promise in 2016, but in 2021 the tech companies went one step further by demanding it openly. This soon turned out to be a strategic mistake, forcing the platforms to retreat. After all, countless users made the switch to other platforms, such as Signal. Elon Musk called on his 42 million followers on Twitter to exchange WhatsApp for the latter platform.
It didn't stop there. WhatsApp's new privacy rules had attracted the interest of a German regulator. They soon came to the conclusion that the data transfer had not been properly arranged.
Then the Germans determined that the user was actually forced to give permission. If they didn't, their account would soon become unusable. The platform went way too far with this, the regulator ruled, and it violated the GDPR rules.
The chief executive of the regulator then wrote a letter to the European Parliament, in which it accused the Irish regulator, among other things, of laxity and negligence. The Irish would have no regard for the violations of the GPDR. They already had an investigation underway against WhatsApp.
The complaint from the Germans, but also from the European Data Protection Board (EDPB) in July this year accelerated the investigation. In September, WhatsApp was fined € 225 million for violating the GPDR. The company was also required to bring its data transfers in line with European GPDR regulations.
WhatsApp's mistake in 2021 was that it constantly emphasized that the user's messages were safe. And so it is. However, the company lost credibility when it downplayed the passing of data to Facebook. That was a big mistake.
In any case, Facebook is known for its ever-growing data hunger. But it was mainly Apple that gave WhatsApp its favor, when the first came out with its own privacy regulations, which showed that WhatsApp collected much more data than smaller competitors like Signal, Telegram and iMessage.
WhatsApp collects data linked to the user for marketing and advertising purposes, but also for other purposes, without making clear what those other purposes are. In general, the emphasis of the competition is mainly on the use of data to improve the functionality of the software.
In the first half of 2021, WhatsApp combined the hassle surrounding the change in its own privacy regulations with downplaying the collection of data for all kinds of unclear purposes. That made the platform's assurance that the app is safe and reliable, implausible.
This is a huge gunman on the part of WhatsApp. The app is free to download. But little to nothing is free. If the product is free, then the user becomes a product. Most users are also comfortable with data being collected from and about them. But there should be a limit to that and there should be clarity about it. In both cases, WhatsApp has failed.
How seriously should the user take the assurance that little will change in the privacy regulations for the European user? The user cannot and will not be forced to accept the regulations at the risk of practically losing his account.