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How Whatsapp Is Moving Into Commerce

How Whatsapp Is Moving Into Commerce


30 Apr 2021

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To help launch the “Stop Facebook, Save WhatsApp” campaign we organized a webinar discussion on April 30th, featuring a stellar panel of digital rights activists and experts. On the agenda: WhatsApp’s move into commerce and the implication for our privacy. With the campaign’s goal focused on stopping Facebook from implementing its scheduled May 15 privacy update, it’s important to understand the context for this latest policy change, which WhatsApp has continued to insist only affects interactions between individuals and businesses.

Yet it is, in reality, another of Facebook’s many broken promises that it made when purchasing the messaging app: to maintain WhatsApp privacy protections as they were. Facebook will now have the chance to obtain even more of our WhatsApp data, through a new ecosystem based on WhatsApp Business. Since a little-noticed privacy update was implemented back in 2016 (users had 30 days to opt out, yet many did not realize this or joined the app afterwards and had no choice), Facebook has been collecting scores of metadata from WhatsApp users, even if chats remain end-to-end encrypted. It is still possible for Facebook to create a detailed profile of WhatsApp users and their activity based on the information that is collected. Facebook will now be able to add payment and transaction data to this list and allow for better targeted ads for WhatsApp users.

The panelists included Mishi Choudhary, lawyer and civil liberties activist at the Software Freedom Law Center, Erwin Huang, a professor at the Hong Kong University of Science and Technology, Michel Roberto O. de Souza, a consumer rights lawyer with the IDEC Brazilian Institute of Consumer Protection, as well as Parminder Jeet Singh, the executive director of India’s IT for Change. The panel was moderated by Burcu Kilic, director of digital rights program at Public Citizen. 

Burcu introduced the event with a short video and a link to the new savewhatsapp.org website. She reminded the audience that Facebook had initially planned to roll out the change, first announced in January, on February 8, but postponed it to May 15 after facing a mass uproar from users. It’s time to make noise once again instead of letting Facebook get away with yet another under-the-radar change to our privacy.

Mishi was the first panelist to speak. She discussed the catastrophe currently unfolding in India, and the degree to which WhatsApp has been vital in organizing for life-saving activities from acquiring hospital beds to blood plasma, which speaks to the power of the platform. She pointed out that though it is not that popular in the United States, where she currently resides, it’s huge throughout many parts of the world including countries like Brazil and across the African continent. The network effects are, therefore, very strong.

“When you, as Facebook, pay $19 billion for WhatsApp, you of course plan to monetize the service.”

Mishi Choudhary

We also know that among Facebook’s many companies, Facebook itself is actually the least profitable. Therefore, Facebook’s goal is to eat up everyone’s engagement, to increase scrolling, and to rely on WhatsApp and Instagram. Zuckerberg doesn’t invent: He cheats and takes and buys. That’s why, looking at China and WeChat, he decided he wanted the Libra currency for Facebook. A continued argument against regulation used by Zuckerberg has, therefore, been that “if you regulate us, China will defeat us.”

Parminder was the second panelist to speak. He further highlighted the importance of WhatsApp to Indians, where the platform has the highest number of users at 400 million.

“It’s the first screen Indians look at when they wake up, and the last one they look at before they sleep at night.” 

Parminder Jeet Singh

In India, WhatsApp has already entered the commerce space and entered into an arrangement with the biggest business platform. It has allowed businesses of all sizes to have business accounts. Business features have multiplied with WhatsApp having a shopping cart and digital payment service. 

In terms of addressing this threat, there’s been discussion between activists and regulators in terms of what this phenomenon of economic exploitation is and under what jurisdiction it falls. Technology regulators and competition regulators have different takes. These digital developments land somewhere in between and we need to try to see how regulations can work both separately and together to address this emerging issue.

Michel spoke third, pivoting to the situation in Brazil, where he works. He spoke of increased concentration of power over recent years. He also referred to the problem of jurisdiction in terms of addressing this issue. Cooperation between different authorities, including competition authorities, as well as cooperation with civil society is necessary.

Michel also spoke of how the situation illustrates more broadly the issues inherent today in Big Tech. When Facebook obtained WhatsApp in 2014, not all regulators properly scrutinized the merger as they should have. Though the 2016 changes were also implemented in Europe, Europe fined Facebook for saying they couldn’t integrate data between platforms when in fact they can. Since 2018, there have been protections for Europeans under GDPR that have helped metadata remain secured on the continent, while the rest of the world is second-class citizens with regard to privacy. 

WhatsApp is also very widespread in Brazil: More people use WhatsApp than have Internet. There are problems in Brazil relating to 0 rating and net neutrality and the three major telecom companies sell plans with Internet and WhatsApp for free. 

“Ninety-nine percent of Brazilians with smartphones have WhatsApp, and 93 percent use it daily. In Brazil, researchers say people spend 30 hours a month on WhatsApp.”

Michel Roberto O. de Souza

Erwin of Hong Kong University spoke third to bring WeChat into the conversation. This is the Chinese service which many see as a potential influence for the kind super app Mark Zuckerberg is looking to create. WeChat has been operating for some time now, in a country where privacy is not given importance. The app has 1 billion users. The chat includes features resembling Amazon and Instagram, as well as handyman services, photos, etc. Some restaurants might even require WeChat to eat a meal. In China, payments are all made over WeChat or another service called Alibaba, using a two-hour code. You can even change currencies using the app, meaning it becomes a de facto banking system. WeChat is also the most profitable gaming company in the world. The existence of WeChat means the app is in possession of a staggering array of personal data about peoples’ lives. Apple is launching it’s 14.5 update which will allow customers to know which apps are taking their data. In China, WeChat encompasses everything so there isn’t any need for an App Store. 

“Western companies trying to copy this kind of data collection are laying the groundwork for a very Orwellian future.”

Erwin Huang 

Mishi spoke again and explained that she wasn’t worried about the same kind of data pillaging happening in India as in China. Efficiency in democratic societies can’t be the only value. Zuckerberg and the Indian billionaires looking to WeChat will have to contend with the public. What is good for tech companies is not always good for society at large. We shouldn’t want to live in a society where the business model is surveillance, where we can’t pay cash and everything we purchase is tracked. We’ve seen in Hong Kong and Taiwan that when tech is part of everyday life it can’t be separated from politics. 

Mishi also pointed to the fact that there has been a lot of money spent by Facebook since the January announcement in order to say that there was a miscommunication regarding the privacy update, while reminding users that WhatsApp isn’t reading your messages. This is a red herring, however, because metadata is more important than the data in chats. More than what I say, it matters what device I’m using, the provider, who I talked to, when I talked to them, and this information can be imparted to businesses that are now being integrated. 

“At least in China there is clarity and not the illusion of privacy as is the case with Facebook and WhatsApp.”

Mishi Choudhary

Parminder chimed back in to offer solutions. He also agreed that WeChat would not be reproduced in India. Yet WhatsApp will still try to integrate as much as possible; it’s already adapted a digital payment system. Apple is trying to play the good guy by providing information about data tracking because their business model doesn’t rely on data. But businesses will do bad when it serves them, so we need a new kind of regulatory model. We need a new digital regulator. We need solutions because the potential convenience factor is huge. Competition commissions need to be able to step in to stop platforms from acquiring all sorts of services. Michel also agreed that more attention needs to be paid to regulation, to investigating mergers and acquisitions in Big Tech. The burden of proof should be on companies that they will do good, not the other way around. 

To conclude the conversation, Burcu took a quick look back at the course of events in the Facebook-WhatsApp merger: In 2014, Facebook acquired WhatsApp and said they wouldn’t change anything until reaching 1 billion users; in 2016, WhatsApp reached 1 billion users and metadata began to be shared; in 2018, WhatsApp had 1.5 billion users and WhatsApp Business was launched; in 2021, there are 2 billion users and, once again, a new privacy update is being implemented, unless we can stop it. To close the session, Renata Avila joined the conversation to discuss the launching of the campaign that aims to stop Facebook from continuing on this ominous path through the May 15 update. We’re relying on people power, parliamentarians, and various other organizations to support the campaign. It was clear from this very informative webinar why we need to “Stop Facebook, Save WhatsApp” and why this latest incursion is just one part of a much bigger shift that we should all find deeply unsettling.