Facebook Inc. (NASDAQ: FB) is feeling the pressure from German regulators after they ordered the social media giant to stop collecting data on German users from its subsidiary WhatsApp. The Hamburg Data Protection Authority (DPA) has even gone as far to say that Facebook should delete data from the app.
Overall, the agency believes that Facebook never gained the effective approval to collect data from its WhatsApp users, and at the same time it does not legally have the right to do so. What brought this about was WhatsApp changing its data-sharing terms in the past month.
Under the new terms, WhatsApp would be able to disclose phone numbers and analytics data of its users to Facebook. WhatsApp also planned to allow businesses to contact customers directly through its platform. This is all under the guise of looking to provide people with a better service. The DPA did not take kindly to this.
The DPA said in a statement:
After the acquisition of WhatsApp by Facebook two years ago, both parties have publicly assured that data will not be shared between them. The fact that this is now happening is not only a misleading of their users and the public, but also constitutes an infringement of national data protection law.
In response, Facebook noted that it has complied with Europe’s privacy rules and that it was willing to work with the DPA to address its concerns.
The DPA had previously noted in March that it was investigating Facebook and whether he company used its dominant market position to make users give up too much personal information.
Previously, WhatsApp was acquired by Facebook in 2014 for a grand total of $19 billion, in an effort to expand the company’s messaging platform. The WhatsApp platform currently serves 35 million users in Germany.
Shares of Facebook were trading at $128.84, with a consensus analyst price target of $155.74 and a 52-week trading range of $88.01 to $131.98.