Why the European Union is investigating WhatsApp and what it could mean for the company if a probe is launched
Facebook Inc (NASDAQ:FB)’s recent acquisition of WhatsApp is prompting privacy probes throughout the European Union. A top privacy regulator for the EU claims watchdogs want to keep an eye on the mobile messaging service and Facebook.
Facebook’s latest buy-up signals concerns
It’s this large acquisition that sparked serious interest in WhatsApp from the authorities. Bloomberg News added, “The proposed cash-and-stock acquisition would be the biggest by Facebook Inc (NASDAQ:FB), the world’s largest social network, and gives WhatsApp roughly the same valuation as Gap Inc. and more than half the market value of microblogging service Twitter Inc. Facebook Inc (NASDAQ:FB) shares advanced 1.7 percent to $71.04 at 11:23 a.m. in New York trading. WhatsApp lets users send messages through its service on mobile devices based on different operating systems including Apple Inc. (NASDAQ:AAPL)’s iOS, Google Inc (NASDAQ:GOOG)’s Android, Microsoft Corporation (NASDAQ:MSFT)’s Windows Phone and BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s software.”
WhatsApp’s main risk
There are 28 data privacy authorities that can choose to probe WhatsApp. Since the company hasn’t established in Europe, the authorities have a right to probe WhatsApp. The main concern behind this is how the collection of user data is used. There is a strong risk that this data will be used for a completely different purpose. The fact that this service also has a collection of data of people who aren’t using WhatsApp is also a big concern for both European and Dutch governments as it’s not compliant with their laws.
Dutch governments have no limits as to what they can fine. Ultimately their decision will be based on the level of the seriousness of the case and whether WhatsApp complies. It doesn’t help that Facebook Inc (NASDAQ:FB) now owns this company. The search giant has its own set of problems concerning privacy. In the last few years, the search giant has come under scrutiny over privacy rights. About two years ago, Europe was forced to remove data collected for the facial recognition program. This was after a probe from Ireland’s privacy regulator.