WhatsApp, which is owned by social media platform provider Facebook (Nasdaq: FB), was slapped with a record fine of €225 million (~$267 million) by Ireland’s data regulator for violating the data privacy laws of the European Union. The stock of Facebook closed at $375.28, down $6.77 or -1.77% from the prior close.
Specifically, the Data Protection Commission of Ireland has pointed out that WhatsApp failed to reveal to the EU citizens the manner in which their data is utilized. Furthermore, the monitoring authority has blamed the messaging app of failing to disclose the Europeans about the strategy employed to collect their personal info, in addition to the way it is shared with the parent company Facebook.
The regulator has directed WhatsApp (Facebook), which claims to have 2 billion users across the globe, to fine-tune its privacy rules and the way it interacts with users so that it adheres with the privacy laws of Europe. The directive implies that WhatsApp should elaborate its data protection standards, which a section of customers and even firms have already criticized for being lengthy and cumbersome.
The company stated that it is intent on providing a safe and private facility. Furthermore, WhatsApp spokesperson revealed that the company has already taken the necessary initiative to offer transparent and elaborate details regarding their service and is committed to doing so in the future.
Furthermore, as anticipated, the official spokesperson of the company announced that WhatsApp would challenge the ruling. “We disagree with the decision today regarding the transparency we provided to people in 2018 and the penalties are entirely disproportionate.”
On its official website, WhatsApp has mentioned that data such as transaction information, phone numbers, business communications, gadget (mobile) related details, and IP addresses, among others, are shared with Facebook. The website clearly highlights that it does not distribute personal interactions, location info, and even call log data.
The amount slapped as a fine is the largest by the Irish regulator for breaching the continent’s General Data Protection Regulation (GDPR). As per GDPR, enterprises should clearly and precisely reveal the manner in which they will use data collected from customers.
The legislation, cleared in April 2016 and implemented in 2018, substituted the earlier regulation named the Data Protection Directive. The GDPR was created to standardize the rules being followed across the 28-country bloc.
Despite the colossal fine, criticism has emerged that EU regulators have been too passive in enforcing the law and penalizing Big Tech for non-compliance.
The news of the fine on WhatsApp is expected to keep the stock of Facebook range-bound with a slight bearish bias in the short term.
The historical price chart indicates that the stochastics indicator is making a negative divergence with the price, signaling a likely deeper price correction in the days ahead. The next major support is anticipated only near 340.
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