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Will WhatsApp’s new privacy policy cause a dent in its market share?

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Industry experts weigh in on the controversy, discussing whether alternatives like Telegram and Signal can replace WhatsApp or if the public outcry will eventually die down

Facebook-owned messaging platform WhatsApp has been under fire ever since it started notifying users about the new privacy policy under which it will share data with its parent company Facebook. Users have left the platform in droves to other messaging platforms like Signal and Telegram. There is a lot of apprehension among informed users about the likely invasion of privacy that the new policy will result in once it comes into effect on 8th February.

WhatsApp has over 2 billion users globally and 400 million+ users in India. Facebook had acquired WhatsApp in 2014 for $22 billion with the intent of using the messaging platform’s massive user base to improve its targeted advertising capabilities on Facebook and Instagram. WhatsApp will continue to have no ads as was envisaged by its founders. However, WhatsApp will drive other services like online payments and social commerce.

Digital industry stakeholders are divided in their opinions on the likely impact of the new policy on WhatsApp‘s market share.

Grapes Digital COO and Strategy Head Shradha Agarwal said that the decision of WhatsApp to monetise user data without providing them a choice can backfire on them as users are not pleased with the new privacy policy. She also stated that the impact on WhatsApp will also depend on the kind of offering that platforms like Signal and Telegram will provide to users.

“This whole episode has generated storms on social media from which other players in the industry like Telegram and Signal could be benefited and can be a better alternative for privacy concerns. Both the platforms have already seen a rise in demand in the past few days. It has become a crucial part of our lives. However, it won’t be an easy task for users to delete the app and shift to other platforms. It depends on their offerings to customers and how they will function,” Agarwal said.

Voiro Founder & CEO Kavita Shenoy thinks that the government should come out with a regulation on data protection as it is very risky to have a dominant player like WhatsApp having access to so much consumer data. She, however, feels that there will be very little impact on WhatsApp‘s business as the alternatives aren’t as strong as WhatsApp.

In India, we are coming out with our own data protection policy. From a consumer’s perspective, there are two types. One is worried about the privacy and they want to be forgotten and the fact that they don’t want to be statistics that would drive a lot of people away from WhatsApp to other platforms like Signal or Telegram. I don’t see that happening on a mass scale because a lot of WhatsApp users in smaller cities and towns have a familiarity with it. They operate businesses through it. There are WhatsApp led businesses. People are not going to let that go easily. More informed consumers will probably switch to other platforms. Big is not necessarily bad but in a country like India giving so much control to one platform is bound to have repercussions economically for people who are running their livelihood on WhatsApp,” Shenoy said.

“Currently, regulation is lacking and the government is definitely trying to do something about it. It is coming at a time when we are still trying to pass the bill that should make everyone uncomfortable. I don’t it will have a big dent in the market share of WhatsApp except for people who don’t want to be part of the eco-system that is being tracked. There won’t be a mass exodus of users from WhatsApp. Apart from Signal and Telegram, we don’t have too many options. People still want to be on WhatsApp because it is convenient. As a country, we have not put in place stringent regulations that cuts our hands off from WhatsApp.”

GenY Medium co-founder and CEO Yashwant Kumar noted that the very strategy behind Facebook’s acquisition was to use WhatsApp data to do targeted advertising. “As a representative of advertisers’ money, it’s a good thing because the entire WhatsApp acquisition by Facebook was based on the premise that they will never be advertising on WhatsApp. They will use demographic cuts etc based on WhatsApp audience profiling and then use it to provide very precise targeting options on Facebook and Instagram. That is what digital advertising always stood for which is targeted advertising so that you don’t show irrelevant ads to people. From a user’s point of view, it can be frustrating to see ads that they don’t want to. So it is good from user perspective also.”

While stating that there is a lot of concern among WhatsApp users about privacy-related issues, he feels that this controversy will soon die down. He further added that targeted advertising will be beneficial to consumers in the long run.

“But the issue is that the user data that WhatsApp collects and there is so much activism around it because it was zero before and now there is one. So there is a shift that users have seen. It is almost like something is being taken away from them. As a result, there is a public outcry. If you look at it objectively, Facebook already has that data with them. From the users’ perspective, they would not see interruptive or irrelevant ads because of targeted advertising. No personal info will be misused it is not a phishing scam,” Kumar said.

He also averred that this public outcry is a temporary phenomenon as the utility that WhatsApp brings to a large section of the society is massive. “This controversy will die down and it will not dent WhatsApp‘s market share purely because of the utility that WhatsApp brings to people’s lives. WhatsApp users are unlike Telegram or Signal’s niche audience. WhatsApp is used by carpenters, plumbers, teachers, parents, grandparents. Those guys are not moving anywhere.”

According to him, the common people will see the data sharing as a trade-off for getting a free utility service like WhatsApp. “It is a balance between what product benefits you give to users at what perceived cost. The perceived cost is that there will be some information that will be used for advertising not on WhatsApp but other platforms. If the controversy dies down then it will be back to normal.”
RepIndia CEO Archit Chenoy said, “WhatsApp’s recently updated terms of services has undoubtedly caused quite a stir. Interestingly enough, WhatsApp had to publish an official clarification against the misinformation on WhatsApp itself. The changes in data sharing for consumer chats will remain unaffected—but what is worth noting, as with other ORM crises we’ve observed; ‘alternative facts’ have a tendency to surmount on WhatsApp. How the platform chooses to tackle this contention, for me, is the most interesting aspect of this development.”
Meanwhile, Internet Freedom Foundation has come out with a note explaining the new WhatsApp privacy policy. The foundation noted that the new privacy policy confirms that Facebook may now have access to messages shared with businesses on WhatsApp and it provides more insight into expansive metadata collection by WhatsApp.

It further stated that the latest changes to WhatsApp’s privacy policy cement the problematic status quo which has existed since the privacy policy was first updated in 2016. It also pointed out that the changes to WhatsApp’s privacy policy in 2016 are also the subject of pending litigation before the Supreme Court of India in Karmanya Singh Sareen v. Union of India, where IFF is an intervenor.

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Javed Farooqui

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