Telegram becomes the New Cool of messaging as millions of users abandon WhatsApp over privacy concerns


 By Simon Davies

In one of the most persuasive displays ever of the market power of consumer privacy, Facebook’s recent $19BN acquisition of the popular messaging app WhatsApp appears to have been given the thumbs-down by millions of users.

While it may be too early to produce a conclusive analysis, there are solid indications that the trend of new sign-ups to messaging apps over the past two weeks has overwhelmingly favoured the privacy-friendly Telegram app and has shifted decisively away from WhatsApp. Telegram has reportedly picked up between two and three million new users a day since the purchase was announced just over two weeks ago.

Image: Business Insider

Image: Business Insider

Some news outlets justified the surge to be a consequence of a WhatsApp outage on February 23rd but were unable to account for the continued growth of Telegram sign-ups outside that date.

Telegram has built a range of attractive privacy features, including heavy end-to-end encryption and a message destruct function. As a result, many privacy professionals regard the app as the market leader for privacy. In contrast, there have been ongoing privacy concerns over WhatsApp. The Facebook alliance has made some users nervous because of the potential for the social networking platform to exploit personal information on WhatsApp.

The surge of interest in Telegram should not, however, be seen as concrete proof that the service is fully secure. A German product test group recently assessed several messaging products and made a number of criticisms of Telegram, Among these was a concern that while the app was in part open source, not enough data was available to permit a full analysis.

The privacy concerns over the WhatsApp deal are substantial. Buying WhatsApp would give any social network substantial leverage into mobile platforms. Buying it would also give access to a massive trove of account data that would allow a deep dive into social networking. Facebook would be able to marry its existing data with a mass of new transaction data, personal information and device data. The acquisition will give Facebook a jump-start on Google in terms of exploiting mobile platforms.

A staggering surge in popularity for Telegram highlights privacy choices

A staggering surge in popularity for Telegram highlights privacy choices

As soon as the purchase was announced on February 19th ,Telegram started reporting a surge in new sign-ups. Within 48 hours of the announcement an unprecedented 1.3 million new users had joined Telegram.  On February 22nd 1.8 million users signed up. Two days later the figure had rocketed to almost five million new signups over a 24-hour period. By then Telegram had suddenly become the most popular iPhone app download in 48 countries.

Perhaps the most attractive asset to Facebook – and the aspect that is of most concern to anyone who cares about privacy – is WhatsApp’s user population and how Facebook will inevitably monetize that asset.  It will be able to lock in many millions of new users by requiring those customers to set up a Facebook Account to integrate reserves of personal data.

The acquisition will give Facebook a jump-start on Google in terms of exploiting mobile platforms.

It is also possible that existing Facebook account holders would be required to sign into WhatsApp with their credentials (in a way similar to the requirement that Google now imposes on users wishing to interact on YouTube). That means under likely revised terms of the Facebook privacy policy that all activities on WhatsApp can be linked to activities across the Facebook platform. This would create a rich seam of advertising data rivalled only by the Google platforms.

There are, however, signs of imminent legal trouble for the acquisition. Jacob Kohnstamm, who leads a group of EU privacy officials known as the Article 29 Data Protection Working Party as well as the Dutch agency that is already investigating WhatsApp, told Bloomberg the main concern is the collection of data from users’ address books on their phones when they download the application. “It is tempting to use this data” for other purposes, he said.

The company’s “collection of data of people that aren’t using WhatsApp is extreme and is not compliant with Dutch and European law.”

US privacy groups have also asked the Federal Trade Commission to halt the acquisition pending a full review of the privacy implications.