Although ‘free’ to use, WhatsApp needs quite substantial resources to run, not to mention that it cost Facebook over $19 billion in 2014. Facebook is not a charity, or a public service utility – it is a very profitable company, with a net income of over $18 billion in 2019.
Despite this there is no clear explanation of it’s business model. Most ‘Free’ services on the Internet are provided in exchange for advertising revenue, hence are paid for by the companies who use them as advertisement brokers. Because Facebook, and Google etc know so much about you they can, in theory, target advertising more effectively and advertisers are willing to pay a premium for this. In some ways this can be an ‘everybody wins’ scenario – the IT company knows that you like, for example foreign travel to exotic places, so show you advertisements about that, rather than, for example, about collecting miniature figurines which you would not want to know about anyway. WhatsApp, however does not show advertisements, targeted or otherwise.
None of the explanations of the WhatsApp financial model are very convincing, and businesses without a way of making money need careful scrutiny.
Contact information is valuable in itself
Much is made of the message security of WhatsApp, and messages between users are highly secure – many experts have verified that the actual messages are private. The trade off you make in exchange for use of WhatsApp services is to give them access to your contact data – that is not only your phone number, but the phone numbers of everybody whose details you store in your phone.
Your contact data says a lot about you, do you shop expensive shops, who else uses the same hairdresser as you, are you a committed member of a political party, who is your doctor, who are your friends (and their friends, and so on). You are likely to share an income level, some hobbies and interests, political leanings etc with your contacts. In military or security circles this is known as Traffic Analysis.
Who does your contact data belong to ?
If you are in a position of responsibility, a doctor, a teacher, a politician, a social worker, a church leader, and so on, you are probably entrusted with the contact information of people who trust you, as a person, but would not necessarily want their details spread more widely, but this is the data which is being exchanged for a ‘free’ Instant Messaging service.
Potential for abuse
The Guardian Newspaper actually suggests that it’s readers contact it via WhatsApp. This provides Facebook – who can be regarded as a rival media organisation – with the the phone numbers of any of its readership who use that route. If say Fox News, or The Times managed to get hold of this information it would be regarded as a security breach, but for some reason the New Media companies seem to be treated as if they were public utilities, rather than commercial rivals (which they are if you, too, are in the business of mediating and conveying information to an audience).
Asthma UK have launched a WhatsApp chat service. Although I am sure it was not the intention of their service, knowing the contacts of the phone number they list, is a list of phone numbers of contact details of asthma sufferers.
Please note that it does not require deliberate action at WhatsApp for this to be an issue. Big Data means that, for example, people with some medical condition may share other characteristics, such as, in countries which use a medical insurance system, higher medical bills, and this will emerge the algorithm automatically without human scrutiny.
Members of Parliament are very fond of WhatsApp, being sold on the security of the signals, not realizing how revealing the membership of various WhatsApp groups can be. Their faith in its security may be misplaced – there is a Wikipedia page dedicated to Reception and criticism of WhatsApp security and privacy features which outlines some of the historical problems (some quite recent) that there have been.