Facebook Inc (FB) Receives FTC Approval to Acquire WhatsApp

Facebook Inc (NASDAQ:FB) received the approval of the United States Federal Trade Commission (FTC) to acquire WhatsApp for $19 billion, but warned both companies regarding its use data collection policies.

Director Jessica L. Rich of the FTC Bureau of Consumer Protection reminded Erin Egan, chief privacy officer of Facebook Inc (NASDAQ:FB) and Anne Hoge, general counsel of WhatsApp regarding the responsibilities of both companies to protect the privacy of their users.

In a letter to both companies, Director Rich emphasized that “WhatApp has made a number of promises about the limited nature of the data it collects, maintains, and shares with third parties—promises that exceed the protections currently promised to Facebook users.”

She made it clear that regardless of the acquisition, WhatsApp must continue to honor its promises to consumers. Once the acquisition is completed and it fails to fulfill its promises, Director Rich pointed out that Facebook Inc (NASDAQ:FB) and WhatsApp could be in violation of Section 5 of the Federal Trade Commission (FTC) Act and potentially, the FTC’s order against Facebook.”

The social network giant was ordered by the FTC to obtain affirmative consent from its users before making changes that will override their privacy settings, and other requirements. The order was part of the settlement agreement of Facebook Inc (NASDAQ:FB) with the FTC to resolve the charges that it deceive consumers by failing to keep its privacy promises in 2011.

In addition to obtaining affirmative consent before making any material changes on how both companies use data already collected from users, Facebook Inc (NASDAQ:FB) and WhatsApp must not misrepresent the extent to which they maintain the privacy or security of user data. Furthermore, both companies were advised to give users the opportunity to opt out to any future changes on how newly-collected date will be used.

In a statement, “We’re pleased the FTC has completed its review and cleared our acquisition of WhatsApp. Naturally, both companies will continue to comply with all applicable laws after the transaction closes.