Recent coverage of a new privacy policy for Facebook’s messaging colossus Whatsapp recently led to something of a digital exodus as users, egged on by Elon Musk and others, moved to alternate OTT providers in droves. As an apparent result this week, Facebook has announced a climbdown, delaying its plans to monetise whatsapp until March. Here MEF CEO Dario Betti unpicks the strategy and what it means for the industry.

Facebook has decided to postpone WhatsApp’s new privacy policy after a public outcry that saw users moving to new to smaller rival messaging services such as Signal and Telegram.

To see the mighty Facebook delay its plans is surprising, the effort to bring all enterprise services under one roof seemed very solid, but the messaging application word is very competitive and even WhatsApp has to consider users’ sentiment.

Over the last six years MEF has tracked the reaction to privacy and personal data in its annual Consumer Trust surveys. Users are getting more and more worried about the treatment and security of their personal data. In fact, at MEF we ran the alarm bell in 2019: the majority of consumers are taking actions, yet most admit they are not seen an effective solutions. An industry that lack trust from its users is built on thin grounds. Users still want free digital services but not at any cost. It is becoming essential for Apps and services to include data management in their consumer experience plans.

Signal and Telegram capitalised on the weakness of their competitor, but the overall market position has not changed. The trend saw a drop in weekly downloads for Whatsapp of about 14%, down to 9 million”

Even the Big Tech companies are now paying the price of badly communicated plans. The postponement is only a marginal setback for Facebook and WhatsApp, but it shows how the entire market has to deal with concerns among the users.

Facebook was integrating most of its services across the Enterprise Suite Framework – a solution that should allow advertisers and commercial units to mix and match services across the group from the social networks to Instagram and WhatsApp. This is a welcome solution from the industry overall, a simpler way to manage communication for enterprises, what we refer to as conversational commerce.

On January 4, WhatsApp started showing its users a pop-up notification asking them to agree to changes to terms and conditions, so that data that could be shared between the app and the units of Facebook became a compulsory acceptance to use the messaging service.

The changes prompted fears among users. Some erroneously thought that Facebook would be using accessing their private messages. Only messages between users and companies would be available for the evaluation. However, the negative sentiment grew, and other messaging platform overtook WhatsApp in weekly downloads.

Signal and Telegram capitalised on the weakness of their competitor, but the overall market position has not changed. The trend saw a drop in weekly downloads for Whatsapp of about 14%, down to 9 million. Telegram overtook Whatsapp in downloads that week reaching 11 million, an increase of about 40%.

Telegram also announced the following week to have reached 500 million active users – still 1.5 billion short of Whatsapp’s claimed active base. Signal, the new messaging app released by the founders of Whatsapp accounted for 8 million downloads that same week. The number of challengers to the Facebook app is now stronger.

The problem of data sharing is not a new one for Facebook. When Facebook acquired WhatsApp in 2014 it pledged not to share data across the social network and messaging app.

However, by 2016 it changed its idea, looking at ways to monetize the free messaging app. Regulators have already commented on the topic. In 2019, Germany’s cartel office blocked Facebook from using the data across services without user consent, while in 2020, US regulators mentioned this as part of a wider antitrust lawsuit against the company.

Dario Betti

MEF CEO

  

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