Facebook Beefs Up Encryption, Despite Regulators’ Concerns

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October 11, 2016 12:05pm Nasdaq:FB

SecurityFrom Zacks: After Facebook Inc (NASDAQ:FB) enabled end-to-end encryption for WhatsApp a few months back, the company has now extended the same to its Messenger platform.


Last week, the social media giant unveiled “secret conversations” feature for Messenger on both Android and iOS platforms. The new feature is so designed that only two people involved in the conversation can read the messages. Let alone any other entities (read governments and privacy watchdogs), even Facebook won’t be able to access these conversations if the user activates the feature. Plus, users will have the option to set a timer for message deletion. Once erased, the messages cannot be retrieved ever.  However, the secret mode will not work for group conversations. Secret Conversations can only support messages, pictures and stickers. Gifs, videos, voice/video calling remain outside the purview of the secret mode.

However, there is one stark difference between end-to-end encryption deployed by Facebook on WhatsApp and Messenger. While on WhatsApp, encryption is the default mode, on Messenger, a user needs to activate the secret mode. Analysts observe that this could be Facebook’s way of avoiding legal/ political problems. Ever since, WhatsApp has deployed encryption, the subsidiary and its parent company have come under fire from various regulatory authorities across the globe. The spat with Brazilian law enforcement agencies and privacy watchdogs over drug trafficking rackets has been the ugliest, resulting in the arrest of a top Facebook executive and several local courts banning the service. However, the decision was overturned later on.

Per media reports, both Messenger and WhatsApp have deployed the Signal encryption system app developed by Open Whisper Systems.

Data collection and security has emerged as a major bone of contention between government and tech companies nowadays especially after the Apple Inc. (AAPLFree Report) –FBI conflict. The problem is none of the sides are wrong from their point of view. Tech companies are doing what they should be doing i.e protecting their users’ data but the government’s demand to gain access to the data stems from national security concerns. Thus, it makes it a highly debatable topic.

In February this year, Apple was ordered by a California judge to provide assistance to the FBI to unlock an iPhone used by one of the attackers in the San Bernardino shooting that killed 14 people last December.

Apple was asked to create a backdoor to its operating system but Apple refused to compromise on the security of its devices. The company’s decision was backed by numerous Silicon Valley members including Facebook, Alphabet (GOOGLFree Report) , Twitter (TWTRFree Report) , Amazon and Microsoft. However, the end of this case came as a shock to tech companies as the FBI managed to crack the code without Apple’s aid.

The Apple-FBI case has indeed been an eye-opener for tech companies like Facebook who are more than ever keen on reinforcing their encryption standards to protect their users’ privacy.

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Facebook shares fell $1.24 (-0.95%) to $129.00 in Tuesday afternoon trading. Year-to-date, FB has gained 23.32%, easily surpassing the 4.83% rise in the S&P 500 during the same period.

This article is brought to you courtesy of Zacks Research.


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