The important part from the article is : "until there is a clearer understanding of how the company intends to use the personal data of WhatsApp’s 450 million users"
FB would be drooling over all the messages, pics & videos on Whatsapp. For person-to-person communication, I prefer a paid app over an ad-supported free one. If I wanted the latter, there are no shortage of options.
I wonder how Whatsapp spells out the usage of personal data in their ToS.
Why not read the ToS? It's pretty clear and very user friendly. The short version - they don't store your data, and there is no right for Facebook to get that data historically.
That's not to say they can't change it in future, but I'm sure if they do there will be a massive exodus from the network.
And to further clarify on your comment - whatsapp is a paid for app, not advert supported. They only charge the iPhone users, however. Cost of the app is $1 for iPhone. Suspect android users would never touch it, as they don't have payment details set up on Google Play's store.
And it seems that they very rarely collect those fees, if at all. I've certainly had my android install over one year, and no request for payment. See plenty of other similar reports online.
Suspect getting users to pay $1 is going to be a real pain, not for the cost, but for the convenience factor.
"In the event that WhatsApp is acquired by or merged with a third party entity, we reserve the right to transfer or assign the information we have collected from our users as part of such merger, acquisition, sale, or other change of control." http://www.whatsapp.com/legal/
"The contents of messages that have been delivered by the WhatsApp Service are not copied, kept or archived by WhatsApp in the normal course of business."
followed by
"If the recipient is not online, the undelivered message is held in WhatsApp’s server until it can be delivered. If the message is undelivered for thirty (30) days, the undelivered message is deleted from our servers. Once a message has been delivered, it no longer resides on our servers. The contents of any delivered messages are not kept or retained by WhatsApp — the only records of the content of any delivered messages reside directly on the sender’s and recipient’s mobile devices (and which may be deleted at the user’s option)."
'I prefer a paid app over an ad-supported free one'
This gets mentioned a lot. I don't quite understand the logic. Say WhatsApp cost users $3.99, when Facebook buys them for 5 billion $3.99s what difference does it make? Facebook gets 3990 messages, a list of people you know, groups and whatever else. They can now add those to their vast collection of stuff they know about you, Facebook profile or not.
What do the $3.99 payment or the 'one weird trick to improve your health' ads have to do with any of this? I don't get it.
> "It is implied that when you pay, you are the customer, and when it's ad-supported you're the product instead."
This meme needs to die. It implies a dividing line where none exists. There is absolutely no reason why you can't end up being both a paying user of a product and have data about you sold on, aggregated etc. If a company can find a way to get paid twice, why wouldn't they do so?
The meme maybe a cliche but it's true. For a for-profit company, there are 4 outcomes :
- Paid without ads : Whatsapp till now. Ideal for personal privacy
- Paid with ads : Bad for users. If whatsapp was doing this, it won't stay hidden for long. The breadcrumbs of your data will lead to whatsapp's door.
- Free without ads : Bad for company
- Free with ads : Facebook. Bad for some, good for others.
Point being, respectable companies that are in for the long run will probably have a clearly defined business plan i.e. sell the product to the user or sell ads to the user. If it's doing both, it becomes evident.
No, it is false and that's why it needs to die. It prevents a wider discussion about business models and leads to (imho) ridiculously oversimplified views that are restricted to advertising and only within the product in question. In the worst case, people may use the heuristic that paying for something somehow gives you a voice (it doesn't) or prevents a company from productizing you (it doesn't).
For example, consider the following cases:
- Google Apps: I may be paying an annual/monthly fee for using Google's services but does that mean they will stop mining all my data and trying to show me 'relevant' ads elsewhere on the internet? Just because they have a new revenue stream doesn't mean their other revenue models stop working.
- Credit cards companies: I'm probably paying fees and interest for my card but that data is still sold on to others for various purposes, including reference agencies and perhaps aggregate info on spending habits. I've seen at least a couple of stories on HN about companies willing to sell such data.
- Tom Tom: I pay for a navigation device which also provides me with traffic data. Data from my journey is also sent back to Tom Tom, aggregated and licensed on to external companies who want access to it. Note that I've already paid for a product, may be paying an additional subscription for traffic data and yet every journey I make is also a revenue generator for them.
It's only big companies that can afford to pursue multiple revenue streams this way but people are woefully naive if they think a well-resourced company won't explore all the ways they could increase their income.
Here's my reformulation of that meme: You are both the customer and the product.
Thank you. That's exactly the point I was trying to make.
The reality is nuanced and the 'free app, you are the product' only overlaps with it only occasionally. (a) Showing you ads isn't the most worrying type of data collection (b) Not showing you ads or charging for something doesn't mean data is not being collected about you in a worrying way.
Whatsapp's business model was neither selling ads or selling apps. It was sell Whatsapp. The "product" was the company, especially the data and the employees (If you're getting paid in stock, you are the product!). If that hadn't worked out they may have gone to plan B or plan C, but IMO that just makes the point that the data is in their hands and their business model can change. They might go into liquidation and have the data auctioned.
If Whatsapp is indeed worth all that money it's worth it for the data it has and can collect. That makes me uneasy.
"You are both the customer and the product" - that's oversimplified as well. You've just put FB, Google, Credit Cards & Whatsapp in the same bucket. That ain't right either.
There's overlap between being a customer & being the product. But the range is so wide that there's no harm in simplifying it by saying FB makes you the product & Whatsapp (pre-acquisition) is the product.
Well, since facebook obviously bought Whatsapp for the userbase, I think it's quite clear that that's exactly what the users were, though in a longer-term strategy.
This meme needs to be shouted from the mountaintops until everybody understands it. Indeed you are correct- a company can be pure evil and charge you for wrecking your privacy. But if the app is free, that's all they can do and it's pretty obvious they are going to do it. If they are charging you for the product, there is at least some hope that they won't, and if they do, they have crossed a moral line- in the same sense as someone selling your email address.
Nonsense. The problem is that it is not harmful enough to those who wish to operate a business by taking advantage of others' ignorance.
In a fair business transaction both sides understand the implications of said transaction. In this type, one is vastly more aware of what is being collected and how it may be used than the other.
It's like being tricked/coerced into giving up the mineral rights to your property because you don't understand the value. Or domain name squatting.
Oh, I know. "It's just business." So that makes it ok.
They have iAd so they've put themselves in the advertising game. The systemic issue with advertising is the desire to extract as much information as possible, in order to better target those ads and help their customers (those paying for the ads) to make a return.
It remains to be seen how much influence the Ad folks in Apple will have over the rest of the iOS/iPhone ecosystem. In the short term, I doubt there's much to worry about but in the long term, and if iAds become a significant revenue driver, who knows.
> It is implied that when you pay, you are the customer, and when it's ad-supported you're the product instead.
That's, frankly, a popular internet-age meme that is complete bullshit.
For example, readers have paid some amount for many newspapers approximately since newspapers became a thing. Nevertheless, for most of that history, the main business of newspapers, from which the majority of their revenue comes -- even for the ones that have paid circulation -- is selling reader eyeballs to advertisers.
With banks, depositors are customers of "we'll store your money safely and/or provide you interest on it" services that banks provide. They are also, by the same act, suppliers of the "we'll give you cash now in exchange for money in the future" that banks provide to borrowers.
Paying for a good or service may make you a customer of that good or service, but it is not, and never has been, exclusive of you also being a supplier of another good or service that the same company is selling to someone else.
Aside from confusing "suppliers of product" with "product", the ridiculously simplistic meme invents an exclusivity between being a customer and being a supplier which has never been a real feature of business. The two roles often coexist, now and for as long as economic interactions have existed.
"If you are not paying, then you are the product" is not logically equivalent to "if you are paying, then you are not the product". !A -> B != A -> !B Denying the antecedent.
I can certainly see how Facebook could monetize Whatsapp's data, but surely it isn't legal for them to retroactively change the ToS and examine the data, right?
Most ToS state that their terms are subject to change. I do not know whether or not a company has to explicitly state that the terms provided are perpetual, but there are lots of examples of companies changing their ToS retroactively.
Pretty much all ToS have a clause that states that the terms can change any time. Where services differ is whether they'll provide you with advance notice (or if you're expected to check for changes yourself!), and if you are able to close your account and have your data removed (I believe this is required in the EU).
Looking at http://www.whatsapp.com/legal/, it appears that WhatsApp falls into the "we can change our terms without letting you know" category, and I don't see anything about their data retention policy :-(
Immediately after striking Facebook-WattsApp deal, Koum had mentioned in one of his tweets that users' privacy and security is their top concern and I hope he sticks to his guns.
Indeed. They may negotiate some privacy agreement in the sale (that is, fb and the feds), but that agreement will likely expire in due course, as it becomes a 'burden' to the business.
Sure he'll get a chair but that's where it stops. FB, the company is about targeted advertisements based on your profile, activity etc. There's no reason why they won't do that with Whatsapp. They have most definitely not paid $19 billion to get only 99 cent revenue every year. They perhaps are eyeing for much more per user.
One element of corporate strategy is that there is strategic value not simply in having [acquired company X] but also having kept it out of competitors' hands.
Facebook owning it means Google, Apple, Microsoft etc don't. Facebook likes that.
Wouldn't that be, to some extent, a conflict of interest? Given that the other shareholders who have paid for WhatsApp want to get a return on their investment, the Board Member who has benefited from the sale is blocking existing shareholders from benefiting from such acquisition.
Lets remember that as a board member he has a fiduciary duty to FBs shareholders, and that means making sound ($) decisions.
Well Jan could argue that it would cause a user exodus which would then reduce the value of WhatsApp (thus facebook) more than the added revenue would increase it.
I'm not saying that he would. Or that he could convince enough of the Board that this is the case. But he could.
That is a good argument. I guess all of this depends on the numbers. What's better in absolute terms?: Exodus of users with immediate positive ROI or user privacy with potential $ in the future. Lets see how it pans out.
> "... without changing the ToS, which will likely cause a user exodus."
How many people are even aware of what the ToS says? I don't recall a mass exodus from Google when they merged their privacy policies so I don't expect to see it here (for similar reasons - where would they go?).
Edit: > "... then jump ship and bring your friends with you."
You make it sound like this is easy. It isn't. That's why networks have value and are hard to build.
How is this good for privacy if Facebook's business model is selling personal information for financial gain? They could change the ToS anytime and sell all your personal information (several years of messages, photos, video) next day. Also, they could pass this all to the government for a nice pile of cash (without needing to change the ToS).
Well Telegram advertised getting 5 million (~1% of WhatsApp) users in a day shortly after the sale was announced. Correlation doesn't always imply causation but in this case that's quite the coincidence.
FB would be drooling over all the messages, pics & videos on Whatsapp. For person-to-person communication, I prefer a paid app over an ad-supported free one. If I wanted the latter, there are no shortage of options. I wonder how Whatsapp spells out the usage of personal data in their ToS.