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April 11, 2014

Federal Trade Commission clears Facebook’s WhatsApp deal, but demands privacy obligations

American consumer protection agency tells WhatsApp to stick to its existing privacy practices even after completion of merger deal.

By CBR Staff Writer

The US Federal Trade Commission (FTC) has approved Facebook’s $19bn acquisition of WhatsApp, while telling them to comply with the promised "privacy obligations".

The agency’s Bureau of Consumer Protection ordered WhatsApp to stick to its existing privacy practises even after the deal goes through, including a pledge not to use users’ personal data for targeted adverts.

The bureau director Jessica Rich said WhatsApp has made a number of promises about the limited nature of the data it collects, maintains, and shares with third parties – promises in excess of those given to Facebook users.

She said: "We want to make clear that, regardless of the acquisition, WhatsApp must continue to honor these promises to consumers.

"Further, if the acquisition is completed and WhatsApp fails to honor these promises, both companies could be in violation of Section 5 of the Federal Trade Commission (FTC) Act and, potentially, the FTC’s order against Facebook."

The latest clearance comes after US Electronic Privacy Information Center (EPIC) asked the FTC to halt the proposed acquisition over concerns that the deal would harm WhatsApp users by allowing their data to be used in Facebook’s advertising business.

Facebook said 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."

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