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Privacy groups ask FTC to block Facebook-WhatsApp deal

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Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#41

Post by sirkneeland »

devcpp wrote: post #32
kevcampb wrote: post #17

Why would any privacy advocate want to block this deal? I can only see this deal being beneficial for privacy in the long run. Facebook are unable to collect data from the service without changing the ToS, which will likely cause a user exodus. It's going to put such a huge unrecoverable dent in Facebook's finances that it will be a significant long term disadvantage to them. If you are a privacy advocate, wait until…

Jump ship? There is none on the horizon.

Isn't Telegram racing to the top of the charts?

Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#42

Post by sirkneeland »

enscr wrote: post #28
amirmc wrote: post #24

Earlier quoted context omitted.

He's joining the Board of Directors, so he does have much more control than most.

Sure he'll get a chair but that's where it stops. FB, the company is about targeted advertisements based on your profile, activity etc. There's no reason why they won't do that with Whatsapp. They have most definitely not paid $19 billion to get only 99 cent revenue every year. They perhaps are eyeing for much more per user.

One element of corporate strategy is that there is strategic value not simply in having [acquired company X] but also having kept it out of competitors' hands.

Facebook owning it means Google, Apple, Microsoft etc don't. Facebook likes that.

Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#44

Post by sirkneeland »

antr wrote: post #30
amirmc wrote: post #24

Earlier quoted context omitted.

He's joining the Board of Directors, so he does have much more control than most.

Wouldn't that be, to some extent, a conflict of interest? Given that the other shareholders who have paid for WhatsApp want to get a return on their investment, the Board Member who has benefited from the sale is blocking existing shareholders from benefiting from such acquisition. Lets remember that as a board member he has a fiduciary duty to FBs shareholders, and that means making sound ($) decisions.

Well Jan could argue that it would cause a user exodus which would then reduce the value of WhatsApp (thus facebook) more than the added revenue would increase it.

I'm not saying that he would. Or that he could convince enough of the Board that this is the case. But he could.

Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#45

Post by amirmc »

enscr wrote: post #25
amirmc wrote: post #23

Earlier quoted context omitted.

> "It is implied that when you pay, you are the customer, and when it's ad-supported you're the product instead." This meme needs to die. It implies a dividing line where none exists. There is absolutely no reason why you can't end up being both a paying user of a product and have data about you sold on, aggregated etc. If a company can find a way to get paid twice, why wouldn't they do so?

The meme maybe a cliche but it's true. For a for-profit company, there are 4 outcomes : - Paid without ads : Whatsapp till now. Ideal for personal privacy - Paid with ads : Bad for users. If whatsapp was doing this, it won't stay hidden for long. The breadcrumbs of your data will lead to whatsapp's door. - Free without ads : Bad for company - Free with ads : Facebook. Bad for some, good for others. Point being, respe…

> "The meme maybe a cliche but it's true"

No, it is false and that's why it needs to die. It prevents a wider discussion about business models and leads to (imho) ridiculously oversimplified views that are restricted to advertising and only within the product in question. In the worst case, people may use the heuristic that paying for something somehow gives you a voice (it doesn't) or prevents a company from productizing you (it doesn't).

For example, consider the following cases:

- Google Apps: I may be paying an annual/monthly fee for using Google's services but does that mean they will stop mining all my data and trying to show me 'relevant' ads elsewhere on the internet? Just because they have a new revenue stream doesn't mean their other revenue models stop working.

- Credit cards companies: I'm probably paying fees and interest for my card but that data is still sold on to others for various purposes, including reference agencies and perhaps aggregate info on spending habits. I've seen at least a couple of stories on HN about companies willing to sell such data.

- Tom Tom: I pay for a navigation device which also provides me with traffic data. Data from my journey is also sent back to Tom Tom, aggregated and licensed on to external companies who want access to it. Note that I've already paid for a product, may be paying an additional subscription for traffic data and yet every journey I make is also a revenue generator for them.

It's only big companies that can afford to pursue multiple revenue streams this way but people are woefully naive if they think a well-resourced company won't explore all the ways they could increase their income.

Here's my reformulation of that meme: You are both the customer and the product.

Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#46

Post by antr »

sirkneeland wrote: post #44
antr wrote: post #30

Earlier quoted context omitted.

Wouldn't that be, to some extent, a conflict of interest? Given that the other shareholders who have paid for WhatsApp want to get a return on their investment, the Board Member who has benefited from the sale is blocking existing shareholders from benefiting from such acquisition. Lets remember that as a board member he has a fiduciary duty to FBs shareholders, and that means making sound ($) decisions.

Well Jan could argue that it would cause a user exodus which would then reduce the value of WhatsApp (thus facebook) more than the added revenue would increase it. I'm not saying that he would. Or that he could convince enough of the Board that this is the case. But he could.

That is a good argument. I guess all of this depends on the numbers. What's better in absolute terms?: Exodus of users with immediate positive ROI or user privacy with potential $ in the future. Lets see how it pans out.

Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#47

Post by dragonwriter »

stingraycharles wrote: post #15
netcan wrote: post #13

Earlier quoted context omitted.

'I prefer a paid app over an ad-supported free one' This gets mentioned a lot. I don't quite understand the logic. Say WhatsApp cost users $3.99, when Facebook buys them for 5 billion $3.99s what difference does it make? Facebook gets 3990 messages, a list of people you know, groups and whatever else. They can now add those to their vast collection of stuff they know about you, Facebook profile or not. What do the $3…

It is implied that when you pay, you are the customer, and when it's ad-supported you're the product instead. In this case, however, you paid for the Whatsapp app, but with Facebook acquiring Whatsapp you'll also pay with your personal data.

> It is implied that when you pay, you are the customer, and when it's ad-supported you're the product instead.

That's, frankly, a popular internet-age meme that is complete bullshit.

For example, readers have paid some amount for many newspapers approximately since newspapers became a thing. Nevertheless, for most of that history, the main business of newspapers, from which the majority of their revenue comes -- even for the ones that have paid circulation -- is selling reader eyeballs to advertisers.

With banks, depositors are customers of "we'll store your money safely and/or provide you interest on it" services that banks provide. They are also, by the same act, suppliers of the "we'll give you cash now in exchange for money in the future" that banks provide to borrowers.

Paying for a good or service may make you a customer of that good or service, but it is not, and never has been, exclusive of you also being a supplier of another good or service that the same company is selling to someone else.

Aside from confusing "suppliers of product" with "product", the ridiculously simplistic meme invents an exclusivity between being a customer and being a supplier which has never been a real feature of business. The two roles often coexist, now and for as long as economic interactions have existed.

Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#48

Post by dragonwriter »

dhimes wrote: post #37
amirmc wrote: post #23

Earlier quoted context omitted.

> "It is implied that when you pay, you are the customer, and when it's ad-supported you're the product instead." This meme needs to die. It implies a dividing line where none exists. There is absolutely no reason why you can't end up being both a paying user of a product and have data about you sold on, aggregated etc. If a company can find a way to get paid twice, why wouldn't they do so?

This meme needs to be shouted from the mountaintops until everybody understands it. Indeed you are correct- a company can be pure evil and charge you for wrecking your privacy. But if the app is free, that's all they can do and it's pretty obvious they are going to do it. If they are charging you for the product, there is at least some hope that they won't, and if they do, they have crossed a moral line- in the same…

> This meme needs to be shouted from the mountaintops until everybody understands it.

This meme needs to die in a fire as it is actively harmful for understanding economic interactions in the real world.

Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#49

Post by izzydata »

dhimes wrote: post #37
amirmc wrote: post #23

Earlier quoted context omitted.

> "It is implied that when you pay, you are the customer, and when it's ad-supported you're the product instead." This meme needs to die. It implies a dividing line where none exists. There is absolutely no reason why you can't end up being both a paying user of a product and have data about you sold on, aggregated etc. If a company can find a way to get paid twice, why wouldn't they do so?

This meme needs to be shouted from the mountaintops until everybody understands it. Indeed you are correct- a company can be pure evil and charge you for wrecking your privacy. But if the app is free, that's all they can do and it's pretty obvious they are going to do it. If they are charging you for the product, there is at least some hope that they won't, and if they do, they have crossed a moral line- in the same…

This isn't a "meme". Please stop using that word where it doesn't belong.

Re: Privacy groups ask FTC to block Facebook-WhatsApp deal

#50

Post by netcan »

amirmc wrote: post #45
enscr wrote: post #25

Earlier quoted context omitted.

The meme maybe a cliche but it's true. For a for-profit company, there are 4 outcomes : - Paid without ads : Whatsapp till now. Ideal for personal privacy - Paid with ads : Bad for users. If whatsapp was doing this, it won't stay hidden for long. The breadcrumbs of your data will lead to whatsapp's door. - Free without ads : Bad for company - Free with ads : Facebook. Bad for some, good for others. Point being, respe…

> "The meme maybe a cliche but it's true" No, it is false and that's why it needs to die. It prevents a wider discussion about business models and leads to (imho) ridiculously oversimplified views that are restricted to advertising and only within the product in question. In the worst case, people may use the heuristic that paying for something somehow gives you a voice (it doesn't) or prevents a company from product…

Thank you. That's exactly the point I was trying to make.

The reality is nuanced and the 'free app, you are the product' only overlaps with it only occasionally. (a) Showing you ads isn't the most worrying type of data collection (b) Not showing you ads or charging for something doesn't mean data is not being collected about you in a worrying way.

Whatsapp's business model was neither selling ads or selling apps. It was sell Whatsapp. The "product" was the company, especially the data and the employees (If you're getting paid in stock, you are the product!). If that hadn't worked out they may have gone to plan B or plan C, but IMO that just makes the point that the data is in their hands and their business model can change. They might go into liquidation and have the data auctioned.

If Whatsapp is indeed worth all that money it's worth it for the data it has and can collect. That makes me uneasy.

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