Not many would remember, but WhatsApp’s initial plan, at the time of the launch, was to provide the service for free for one year and then charge $1 for its annual subscription. As the company started gaining more users, the free period kept on getting extended until Facebook acquired the chat platform in 2014.
With 600 million users, WhatsApp at the time had the potential to grow bigger than Facebook. However, the real challenge was to harness data. As chats were encrypted, Facebook could do little but to connect personally identifiable information. Given that pesky ads would have deterred people from using the service, the company’s only option was to grow its business use cases.
Over the years, thanks to smartphones gaining popularity, Facebook expanded its domain. Expansion of users—WhatsApp now has 2bn users—and emerging business use cases has allowed Facebook to monetise services. It charges businesses to send messages over WhatsApp and recently got the nod from RBI to incorporate payments. Earlier this year, it changed its terms and conditions, allowing it to do more in terms of data collection and user tracking from its business accounts and over its payment transactions.
A week after WhatsApp announced that it would be changing its terms and conditions, creating a huge furore in India and across the world, on Saturday, the company said that it was postponing its policy roll out to May 15. Although WhatsApp was not giving up its encryption standards in favour of access to more data, rumour mills and Facebook’s past mistakes with data handling led people to assume the worst. It did not help that Elon Musk endorsed chat platforms like Signal, which espouse better privacy standards.
Signal and Telegram have witnessed a surge in downloads since. Until last week, Signal had accumulated 7.5 million new users, while Telegram had gotten 9 million. The pressure on Signal’s servers became so much that the service crashed on the weekend.
While WhatsApp service has nothing to do with data leaking, the areas of concern are not WhatsApp can do today, but what it will do in the future. More importantly, the fear is reverse engineering of personally identifiable information. Even if WhatsApp does not leak any of chat history, in the future, when it is monitoring payments and chats with business users, it can collect information to build more accurate user profiles.
The problem is not so much WhatsApp’s conditions but data privacy laws across the world. In countries where there is a data privacy law, WhatsApp can do little to collect user information. But where privacy laws are in a limbo, the company gets freehand. However, users have started valuing privacy. What the WhatsApp episode has made apparent is that even though users do not respect privacy as much as other features, there is a line that companies cannot afford to cross.
But what is the way forward? Data privacy laws are a must, but users also need to realise that there can be no free lunch. There is a price to security and safety, and that can either come via trading of data or following a subscription model. Free services like Signal and Telegram can only run for so long; ultimately, they would want to monetise. More users require more people to handle security, more servers and more databases.
WhatsApp and other messengers can ensure that not all users have to abide by the new terms and conditions. Those who want to stick to the old ones need to be given a choice to either switch to a paid model or use the one with existing features.
The market might not have been ready a few years ago when WhatsApp launched its $1 plan, but companies would be surprised to find out how much people are willing to shell out for privacy. The growing demand for VPNs is a case in point.