The Secretary of Internal Trade extended the prohibition to WhatsApp to implement the updates of “privacy policies” until the conclusion of “the ongoing investigation”, which began in May of last year, by alleged “abuse of dominant position”.
The measure was ordered by Resolution 224/2022, published this Monday in the Official Gazette, which extends the validity of Resolution 492 of May 14, 2021, issued by the former Secretary of Internal Trade Paula Español.
At that time, it was considered that Whatsapp and the company Facebook (currently Meta) would incur in “a situation of abuse of dominant position”taking into account that “there is empirical evidence that the worldwide demand for the WhatsApp Messenger application, with more than two billion users, far exceeds platforms such as Telegram.”
The rule covers Whatsapp LLC, Meta Platforms Inc and “any other company controlled by the latter, which directly or indirectly participate in the business of the WhatsApp Messenger messaging application.”
These firms must refrain from implementing or suspending “the update of the Terms of Service and Privacy Policy of WhatsApp Messenger, whose entry into force was planned for May 15, 2021”.
Nor may they “degrade the quality of service and functionalities of WhatsApp Messenger to users of the application who have not accepted the Terms of Service and Privacy Policy in question, including (but not limited to) the elimination of persistent messages or any other type of usual use of the application”.
Likewise, they must refrain from “exchanging the data, metadata and all other types of information provided by WhatsApp Messenger users or automatically collected by WhatsApp LLC, with other companies and platforms controlled by Meta Platforms INC, even in the cases of users who have accepted the update.
Both companies will have to notify their users of the application of the measure, either through the same application or through the official website.
In an investigation by the National Commission for the Defense of Competition (CNDC), it was found that “WhatsApp has a penetration that exceeds 76% of mobile phones in our country”while “the other messaging applications still have low penetration”,
“Thus, the user cannot replace it without losing this means of communication with many of his contacts”, determined the investigation.
“This creates a strong asymmetry in bargaining power between the user and WhatsApp, so they will mostly be forced to accept the new Terms of Service, thereby enabling WhatsApp to collect excessive personal data and share the personal information of improperly with other applications of the group, such as Facebook and Instagram,” the CNDC added.
For its part, in the recitals of the resolution it is indicated that “there would be an excessive or unjustified collection of personal data of WhatsApp Messenger users, which could date back to at least 2016, and that it would be enhanced with the update of its Conditions of Service and Privacy Policy”.
If the new privacy policies are applied, the resolution continued, “WhatsApp Messenger users would see their right to informative self-determination violated because they do not have real options to self-exclude themselves from the aforementioned update, from the excessive collection of their data, from their processing and that this data is shared with other companies”.
Finally, he warned about the “exploitation of users”, since the new policy “would be part of a systematic practice that would also have as its objective the generation of metadata to profile users/buyers, that is, to generate an asset that is difficult to replicate by potential competitors or, in other words, to generate barriers to entry in the online advertising market; all of this in probable violation of the competition defense regime”.
