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WhatsApp’s more public affliation with its parent company Facebook is beginning to prove problematic, but its ubiquity within a given user’s inner circle will insulate it from any long-term damage, industry experts believe.
The world’s most popular messaging app is in the midst of navigating a crisis of confidence sparked by a January 4 update to its terms of use and privacy policy, which has eroded user trust in the security of the app.
The update, which was communicated to users in a popup notification, contained details of WhatsApp’s data-sharing policy with Facebook. While the policy is not new—WhatsApp has been sharing account information such as a user’s phone number and device details with Facebook since August 2016—it was the first time many users were explicitly made aware of how their data was being used.
Ogilvy’s head of experience technology, Jason Davey, says the WhatsApp brand has benefited from “a level of ignorance amongst the general public” over its ownership. This has insulated WhatsApp from the “sustained backlash” that Facebook has witnessed in recent years over its handling of user data, most notably in the 2018 Cambridge Analytica scandal.
WhatsApp meanwhile has traded on the fact it has end-to-end encryption to position itself as a privacy-concious business. “Users have been under the impression that because the messages themselves couldn’t be read, that therefore it was safe,” explains Belinda Barnet, a senior lecturer in media at Swinburne University of Technology in Melbourne. Many users may falsely have believed that message encryption protected all of their data from being shared, which explains why the January 4 update caused such widespread shock.
“All this time it’s been collecting stuff like the operating system that you’re on, the device that you’re on, your device ID—information which arguably reveals more about you and your socio-economic status, for example, than the content of your messages,” Barnet says. “That’s all come to light in this announcement.”
The mandatory nature of this data-sharing has proved especially irksome. The January 4 update removed a passage in the privacy policy that had allowed users to opt out of sharing their account information with Facebook. Users were asked to accept the terms to continue to use the messaging app, an approach that is “pretty far from what consent should look like under laws like GDPR”, privacy organisation Privacy International tweeted at the time. In reality, the window to opt-out of data sharing had closed in 2016.
Privacy literacy is increasing
A global boycott movement has had an immediate impact on WhatsApp’s user numbers. According to Sensor Tower, as of last Thursday (January 14), WhatsApp installs were down by 16% to 12.2 million in the 10 days following the January 4 announcement, compared to 14.6 million installs in the days preceding.
Xiaofeng Wang, a senior analyst at Forrester, believes the consumer backlash points to a rise in data privacy awareness. “Privacy-conscious consumers demand companies and brands to provide more transparency and granular consent,” Wang says. Confusion over WhatsApp’s data collection practices and how long it has been sharing data with Facebook points to the need for “better transparency and communication”, she adds.
WhatsApp has addressed such confusion in the past few weeks by sharing graphics on social media and taking out full-page ads in newspapers that explain its data-collection practices. WhatsApp head Will Cathcart has been especially active with the press in India, its biggest market with 340 million users. In an interview with Campaign India on Friday (January 15) Cathcart discussed how the app is competing to retain user trust in the messaging category.
As WhatsApp installs have declined, users have displayed fresh interest in more privacy-centric alternatives such as Signal and Telegram. In the 10 days following WhatsApp’s announcement, Signal installs shot up to 19.3 million from 317,000 in December, while Telegram more than doubled installs from 8.5 million to 17.4 million.
BBH Singapore’s chief strategy officer, Jacob Wright, suggests such rapid user fluctuations show that Facebook’s social-media monopoly could be undermined.
“Social platforms and messaging apps look to me increasingly like a trend-driven category like spirits, where one brand is in the ascendant for a few years [but] then tails off as newer, more exciting competitors emerge,” Wright says. As a consequence, WhatsApp is “very vulnerable” to having its dominant share eroded by other apps, he adds.
A short-term impact
WhatsApp’s user base is not expected to take a meaningful hit from the privacy crisis, primarily due to the difficulty users face when attempting to shift all their contacts from one app to another. This is what makes messaging apps “inherently sticky”.
“Messaging platform adoption depends on your complete circle of friends and family following in your footsteps,” says Ogilvy’s Davey. “With over 2 billion users globally, it will take more than this policy update issue for non-savvy WhatsApp users to bother switching, learning a new app, setting up new contacts, etc.”
In Asia-Pacific, WhatsApp has also established itself as a core part of the way many people do business with features such as WhatsApp Pay and Carts, explains Joshua Lowcock, the global chief brand safety officer at Mediabrands. “Signal is unlikely to replicate those features in the short term,” he says.
Sunil Naryani, the VP of commercial and partnerships at Dentsu APAC, goes on to suggest that convenience will override privacy concerns in consumer’s minds.
“WhatsApp has evolved from being a pure peer-to-peer utility app which built its brand popularity on simplicity, ease of use and free messaging to a scaled digital platform that now also enables commerce and customer service for millions of businesses,” says Naryani. “These are all strong value elements or reasons for users to stick with the platform. Ultimately it is about being comfortable with the value exchange, and I don’t think there is a unanimous vote across the general population to put data privacy ahead of convenience and simplicity.”
Plenty of examples exist of boycott movements failing when deleting an app becomes an inconvenience. The #DeleteFacebook movement has flared up and dissipated rapidly over the past few years without putting a substantial dent in Facebook’s user numbers.
“On average, globally, high privacy-conscious consumers aren’t mainstream yet, so for WhatsApp it’s more likely to be a short-term decline,” explains Forrester’s Wang. But she warns that if WhatsApp cannot improve or adequately communicate its data-privacy transparency and consent granularity, it “will become a more serious issue in the long run”.
Competing for time
With a growing cohort of the internet population using more than one messaging app (60% of Singaporeans use two or more, and 23% use three, according to a Global Web Index report), WhatsApp may find it has to work harder to compete for user’s time.
“WhatsApp may hang on to its large numbers of active users—after all, even if all your friends are on Telegram, you still need to message your mum somewhere. But their time is likely to increasingly be shared across multiple messaging platforms,” says BBH’s Wright.
Mediabrands’ Lowcock agrees: “I expect it’s more likely that people are now also using alternatives such as Signal than deleting WhatsApp.”
Competing over user experience
Signal and Telegram’s ability to retain WhatsApp users may be tarnished by their (comparatively) limited functionality and user experience teething problems, as the apps struggle to cope with a sudden influx in demand.
“Data privacy isn’t the only factor that makes consumers choose one platform over another. User experience, functionality, stability, and popularity (how many of their real-world networks are using it) all matter,” says Forrester’s Wang.
Ogilvy’s Davey says user experience is a “major consideration” in an app’s ability to compete, pointing to the race between Zoom, Microsoft Teams and Google in the past 12 months: “Their user experience changed every week as they mimicked and fought to maintain user preference via experience,” he says. “I understand the Signal app crashed under the pressure of new registrations this week, so that’s not a great start.”
Naryani believes users are more forgiving of hiccups if their priorities are met: “Rome wasn’t built in a day, and if privacy was the key value element or reason to migrate to Signal/Telegram then surely users will make peace with the current UI/UX.”
Accelerating legislative action
While WhatsApp is not expected to see a significant change to its numbers, users also have the power to influence legislative change, with the privacy debate already catching the attention of several governments. India is reviewing the policy and may summon Facebook officials to explain its stance, while Turkey’s competition watchdog has initiated an antitrust investigation. Hong Kong last week urged WhatsApp to extend the deadline for the enactment of WhatsApp’s policy, due February 8, to allow users more time to understand the ramifications of the policy.
On Friday (January 15) WhatsApp relented to the mounting pressure, announcing it would delay the enforcement of the new privacy policy by more than three months, till May 15. In a blog post it acknowledged the update has caused “much confusion” and said it planned to “do a lot more to clear up the misinformation around how privacy and security works on WhatsApp”.
Users want to be provided with the option to opt-out of the data-sharing agreement with Facebook, but social media experts don’t see this happening.
“An opt-out option from Facebook would be a pleasant move and would certainly show they are doing more to respect user consent, but I doubt we will see a backtrack in the near term,” says Naryani.
With no real threat of meaningful user loss, Facebook has no incentive to change its data-collection practices. It will only backtrack on how much data it collects on users when it is legislated to do so, as it was in the wake of Cambridge Analytica, or under the laws of GDPR, Barnet believes.
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