Facebook-owned WhatsApp has been urged by the Indian government to withdraw changes to its new privacy policy, Bloomberg has learnt.
According to a Jan. 19 Bloomberg Quint report, India’s Ministry of Electronics and Information Technology has written a “strongly worded” letter to the CEO of WhatsApp, Will Cathcart. The Indian government’s letter states that the proposed changes to WhatsApp’s privacy policy “raise grave concerns regarding the implications for the choice and autonomy of Indian citizens”.
Facebook’s (FB) WhatsApp has seen an uproar in India over its revised privacy policy, which was claimed to allowed increased sharing of user data. According to the letter sent by the Indian government “any unilateral changes to the WhatsApp terms of service and privacy would not be fair and acceptable.” (See FB stock analysis on TipRanks)
India represents one of WhatsApp’s largest markets. According to a Jan. 12 Tech Crunch report, citing data from mobile insight firm App Annie, in December, India had 422 million monthly active users on Google’s (GOOG) Android platform alone.
While earlier WhatsApp had given a date of Feb. 8 to review and accept the new privacy policy, on Jan. 15, in a blog post, the company said that it was now extending the date to May. 15. The social media giant said in blog post, “No one will have their account suspended or deleted on February 8. We’re also going to do a lot more to clear up the misinformation around how privacy and security works on WhatsApp. We’ll then go to people gradually to review the policy at their own pace before new business options are available on May 15.”
On Jan. 15, Merrill Lynch analyst Justin Post reiterated his Buy rating on the stock, setting his price target at $345. Since WhatsApp unveiled its updated privacy policy, Facebook shares have been selling off. However, Post believes that the impact on FB shares will be short-lived.
Regarding the changes in WhatsApp’s privacy policy, he commented, “In our view, given privacy policies that prevent WhatsApp from reading personal messages, and the large established user base that creates stickiness, we think the controversy on WhatsApp will fade, and the app will maintain high engagement for the vast majority of core users.”
Wall Street analysts are bullish about the stock and the consensus is a Strong Buy based on 31 Buys, 2 Holds, and 1 Sell. The average price target of $324.84 suggests upside potential of around 29.2% over the next 12 months.
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