The Indian government and Facebook have brawled for months over WhatsApp’s policy update. The first blows flew in January when India’s IT ministry wrote a letter to WhatsApp saying the update posed “grave concerns” for Indian citizens, to which WhatsApp responded by running a media blitz defending the app. Meanwhile, WhatsApp’s failure to properly articulate the effects of its privacy update spooked users—both in India and abroad—and prompted an exodus towards rivals Telegram and Signal.
India’s user concerns and regulatory pushback risk derailing WhatsApp’s monetization efforts in its largest market. According to a 2020 eMarketer forecast, WhatsApps’s user base in India—currently the largest of any country—is expected to increase from 390.1 million users in 2020 to 507 million by 2024. If Indian regulators block the update, WhatsApp stands to lose the significant revenue opportunity this user base could generate through its new payments and ecommerce services.
To avoid this, Facebook may need to come to the table with Indian regulators to address some of their demands. A compromise could look like releasing an India-specific version of the update that allows users to opt out of sharing data with Facebook, like it has in the past. This could resolve the CCI’s issue with the platform’s “take-it-or-leave-it” view on privacy while still giving some room for monetization in the app’s biggest market. In this situation, Facebook may still experience a revenue hit from users who opt out of sharing their data, but this would likely be a far more attractive solution than dealing with a government-imposed outright ban on the update.