There’s been a furor around WhatsApp this week. New terms of service that seemed to suggest the encrypted messaging app would start sharing a lot more data with Facebook Inc., its parent company, sent users into a frenzy. Elon Musk even advocated use of a rival service, Signal, to his 42 million Twitter followers.
How much will this matter to Facebook? Very little. People are spending just as much time on WhatsApp this week as they were before the new user agreements were announced, according to app analytics firm Apptopia.
And this kind of thing happens every few years. Facebook makes changes to make more money from its services, which span WhatsApp, Instagram, and Facebook Messenger. A slew of users get upset about the new terms, which generally include a data grab to feed the company’s advertising business. But then they promptly return to using the apps in much the same way they did before. There’s little to suggest things will be any different this time around.
To be sure, more people are now downloading Signal and Telegram, another messaging app that offers encryption. In the week before WhatsApp started alerting users to the new terms, Signal averaged 43,689 downloads a day, according to Apptopia. This week, it’s averaging 1.6 million daily installations. That doesn't mean they're deleting WhatsApp.
Signal certainly is a good alternative, as it’s run by a non-profit foundation and captures very little user data. Creator Moxie Marlinspike wrote in a blog post last year that, when the US government obtained access to Signal user data through a grand jury subpoena, the only information it contained was the date of the account’s creation and its last date of use.
Conversely WhatsApp, while it can’t read the content of your messages, does capture data on who you contacted and when, how much, and how often you use the app, and plenty more besides. But it was already gathering and sharing such data with Facebook — it has been since 2016. The new terms of use pertain to how the businesses you interact with on WhatsApp use your data, and how they share this with Facebook to serve ads and other services on its core “blue app,” as the eponymous social network is known.
The changes are clearly part of Facebook’s efforts to make more money from WhatsApp’s users. Its November agreement to acquire Kustomer Inc., a software company that helps businesses manage customer conversations, for $1 billion will surely support the push. User engagement with Facebook’s main app is waning in North America and Europe. So far, Chief Executive Officer Mark Zuckerberg has managed to offset that with soaring Instagram revenue growth. WhatsApp is a largely untapped resource.
But he needs to be careful not to aggravate regulators. Germany’s Federal Cartel Office censured Facebook in 2019 for the way it gathered data about the websites its users visited outside of its services, saying it abused its dominant market position to impose unfavorable terms and conditions. A court upheld the order to stop the practice last year. The WhatsApp play looks similar — people won’t be able to use the app after next month if they reject the new agreement.
Even as more people download rival services, there’s little evidence that they’re using WhatsApp any less as a consequence. The service’s user base is simply so big that people essentially have to stay on the platform if they want to keep communicating with specific contacts. Even after the recent surge, Signal only has 8.3 million daily users and Telegram has 44 million, per Apptopia estimates — these amount to rounding errors compared with the two billion users on WhatsApp. The upshot is likely to be that people will simply have more messaging apps installed on their phones.
Remember the first “Quit Facebook Day” back in 2010, in reaction to the company’s data-harvesting practices? Since then, Facebook has grown revenue 100-fold and added 1.8 billion monthly users. History has shown that it is able to impose new terms and conditions on users with little negative consequence. Rinse and repeat.
(Bloomberg)
