In 2014, Facebook bought the messaging system Whatsapp for $22B; it was a weird fit, because Whatsapp founders had decried Facebook's surveillance-based business model and targeted advertising, and had promised its users "No ads, no games, no gimmicks."
Late last year, the cofounders of Whatsapp left Facebook, saying little at the time -- but then, in the midst of the Cambridge Analytica scandal, Brian Acton, one of the founders, tweeted "It is time. #deletefacebook."
Acton has said little in public since, but in a long, revealing interview with Forbes's Parmy Olson, he frankly discusses the bad decision he made to trade his vision for the company he'd built for billions, and how he should have understood that Facebook would never keep its promises to preserve Whatsapp's autonomy and privacy protections. He also reveals that when he left the company, he declined an offere of $850,000,000 in unvested stock in exchange for signing a nondisclosure agreement that would have kept him from discussing any of this.
The interview is a revealing look at the internal culture of Facebook, particularly how the company's senior management kids itself -- and the employees -- that taking actions that make its products simultaneously worse and more profitable is actually good for the company's users.
It's really clear from the interview that Whatsapp users should expect to have their activity tracked and used as part of Facebook's overall, creepy surveillance.
I stopped using all Facebook products a few years ago. I don't visit Facebook pages, I block its beacons, and I migrated my family off of Whatsapp for group messaging. I don't have an Instagram account. There's unquestionably a lot of value that people get from Facebook, but the company can't and shouldn't be trusted.
Later he learned that elsewhere in Facebook, there were “plans and technologies to blend data.” Specifically, Facebook could use the 128-bit string of numbers assigned to each phone as a kind of bridge between accounts. The other method was phone-number matching, or pinpointing Facebook accounts with phone numbers and matching them to WhatsApp accounts with the same phone number.
Within 18 months, a new WhatsApp terms of service linked the accounts and made Acton look like a liar. “I think everyone was gambling because they thought that the EU might have forgotten because enough time had passed.” No such luck: Facebook wound up paying a $122 million fine for giving “incorrect or misleading information” to the EU—a cost of doing business, as the deal got done and such linking continues today (though not yet in Europe). “The errors we made in our 2014 filings were not intentional,” says a Facebook spokesman.
“It just makes me angry to even relive that,” Acton says.
Linking these overlapping accounts was a crucial first step toward monetizing WhatsApp. The terms-of-service update would lay the groundwork for how WhatsApp could make money. During the discussions over these changes, Facebook sought “broader rights” to WhatsApp user data, Acton says, but WhatsApp’s founders pushed back, reaching a compromise with Facebook management. A clause about no ads would remain, but Facebook would still link the accounts to present friend suggestions on Facebook and offer its advertising partners better targets for ads on Facebook. WhatsApp would be the input, and Facebook the output.
(Image: Alessio Jacona , CC-BY-SA)