WhatsApp to give users' phone numbers to Facebook for targeted ads

Messaging service will begin sharing private information with Facebook and is preparing to allow businesses to message users

Mobile messaging service WhatsApp will give its parent company Facebook personal information including users’ phone numbers, as part of plans to allow businesses to send messages to users.

WhatsApp’s billion-plus users will be notified of the change to its privacy policy from 25 August. They will have 30 days to decide whether to opt out of their information being used for ad targeting on Facebook, but will not be able to opt out of their data being sharing with the social network.

The ad targeting will be on Facebook’s platform, which has 1.71 billion monthly active users, with WhatsApp saying it won’t put banner ads or allow spam on its own platform.

A WhatsApp spokesperson said: “We want to explore ways for you to communicate with businesses that matter to you too, while still giving you an experience without third-party banner ads and spam.

“Whether it’s hearing from your bank about a potentially fraudulent transaction, or getting notified by an airline about a delayed flight, many of us get this information elsewhere, including in text messages and phone calls.”

The testing of tools designed to allow businesses to contact users was originally announced when WhatsApp dropped its yearly service fee on 18 January this year.

The phone number associated with a user’s WhatsApp account will be used on Facebook to show them ads. This will form part of the targeting the company allows for paying advertisers, who can upload contact databases. Those who use Facebook and are in the contact database uploaded by the advertiser will then be shown the targeted ads.

The information will also be used to show how people interact with a specific ad, but Facebook said that it would not tell advertisers who specifically interacted with the ad.

WhatsApp and Facebook accounts will remain separate. The service will not be merged with Facebook’s other chat-based service Messenger or photo-sharing service Instagram. But all services under Facebook will gain access to WhatsApp users’ phone numbers and other account information, and it can be used to suggest contacts be added as friends.

WhatsApp said: “We won’t post or share your WhatsApp number with others, including on Facebook, and we still won’t sell, share, or give your phone number to advertisers.”

End-to-end encryption

All messages sent using an up-to-date version of WhatsApp are sent encrypted end-to-end from the sender to the recipient preventing WhatsApp or anyone else from reading its contents. As a by-product, it also blocks the company targeting ads against what is said in messages, a common tool used by Facebook, Google and others.

What’s unclear is whether WhatsApp will allow companies to send users marketing messages. The company insists that it will not allow spam and is simply testing systems that replicate the current communications sent to users from banks, airlines and other services that use SMS to notify customers of events such as fraud alerts or travel delays.

However, the company’s updated privacy policy states that “messages you may receive containing marketing could include an offer for something that might interest you”.

Users can block messages being sent to them from numbers or accounts entirely, which should mean they can also block any messages sent from companies, should the function remain unchanged.

The company still insists that it does not sell ads when activating the service, linking to a blog post from 18 June 2012 titled “why we don’t sell ads” that emphatically states that “remember, when advertising is involved you the user are the product”. The post was made before the sale of billion-user messaging service to Facebook, although the company insists that the values still stand.

Multi-pillar approach

Facebook has been making moves to increase its share of user time on mobile devices by pushing services such as Facebook Messenger and WhatsApp that operate in addition to its core social network and Facebook app. In doing so it has added further users, beyond those signed up and using Facebook, to its user base.

But it has yet to fully leverage that non-Facebook userbase for its main revenue generating activity, advertising. Instagram has advertising, but neither WhatsApp nor Facebook Messenger currently does.

Messenger has been used as a test bed by Facebook for interactions with chatbots, brands and businesses, allowing users to book tickets to shows, ask for news and have services delivered to them in text or multimedia form along with their friends’ messages.

Although the crossover between WhatsApp and Facebook’s other services is undoubtedly high in developed nations, WhatsApp’s strength has been in reaching those who would not use or cannot use Facebook in developing nations and areas of poor connectivity.

How Facebook proceeds with revenue generation from the messaging service beyond the obvious customer service activities without spamming users remains to be seen. Many fear the introduction of marketing messages and other ads, despite the assurances of WhatsApp that there will be no spam.

Don’t let WhatsApp coax you into sharing your data with Facebook

When WhatsApp, the messaging app, launched in 2009, it struck me as one of the most interesting innovations I’d seen in ages – for two reasons. The first was that it seemed beautifully designed from the outset: it was clean, minimalist and efficient; and, secondly, it had a business model that did not depend on advertising. Instead, users got a year free, after which they paid a modest annual subscription.

Better still, the co-founder Jan Koum, seemed to have a very healthy aversion to the surveillance capitalism that underpins the vast revenues of Google, Facebook and co, in which they extract users’ personal data without paying for it, and then refine and sell it to advertisers. In a blog post headed “Why We Don’t Sell Ads” written in June 2012, for example, Koum quoted approvingly a memorable line uttered by Tyler Durden (played by Brad Pitt) in the movie Fight Club: “Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.”

“When we sat down to start our own thing together three years ago,” Koum wrote, “we wanted to make something that wasn’t just another ad clearing house. We wanted to spend our time building a service people wanted to use because it worked and saved them money and made their lives better in a small way. We knew that we could charge people directly if we could do all those things. We knew we could do what most people aim to do every day: avoid ads.”

And Koum was as good as his word. WhatsApp grew and grew, because it did what it said on the tin. Its growth was funded by $58m from Sequoia Capital, the only venture capital firm to invest in it. By February 2013, WhatsApp claimed 200m active users worldwide, and had a valuation of $1.5bn – not huge by Silicon Valley standards but pretty good for an outfit that had an honest business model.

And then, in February 2014, something strange happened. Facebook offered to buy the company – for $19bn – and Koum and co took the bait. Given that Facebook’s business depends on selling ads, most of us wondered what had happened to Koum’s admirable principles and concluded, gloomily, that everyone has a price.

But for a while WhatsApp continued as before within the Facebook stockade. Not only did it not sell ads, but in November 2014 it announced that it was introducing end-to-end encryption for all WhatsApp communications – which meant that nobody, not even Facebook, could read (and thereby monetise) its users’ messages. So the puzzle continued: why on earth had Mark Zuckerberg paid such a whopping price for a service that he couldn’t exploit?

Now we know. On 25 August WhatsApp announced that it was changing its terms and conditions and its privacy policy. In a blog post which is a masterpiece of lawyerly euphemism, it tells us that it is going to “share” with Facebook its users’ phone numbers and details of the last time they signed on to WhatsApp. Every user is asked to click “Agree” to this proposition – although, of course, they can always reverse this agreement if they can find the relevant section of their settings.

Needless to say, this radical change has nothing to do with the needs of WhatsApp’s corporate owners. Perish the thought: it’s to improve things for you, the user. It’s all about using “your WhatsApp account information to improve your Facebook ads and products experience”. And, just to make sure you understand the magnitude of the decision you are about to make, “If you tap ‘Don’t Share’, you won’t be able change this in the future”.

Seasoned observers of the computer industry will recognise this for what it is: just another illustration of the power of the default setting. In marketing-speak, it’s how to “Nudge Your Customers Toward Better Choices” – an implementation of the philosophy set out by Cass Sunstein and Richard Thaler in their book Nudge: Improving Decisions About Health, Wealth and Happiness.

Of course, it’s true – as Sunstein and Thaler argue – that defaults can sometimes be used to ensure that people do things that are good for them, like ensuring that they enrol in a pension scheme. But in the computer industry, defaults are often deployed purely in the interests of corporations.

So if you’re a WhatsApp user, don’t fall for this particular wheeze: go to “Settings”, select “Account”, “Share my account info” and tap on “Don’t Share”. And do it now, because time’s running out.