Following In Facebook’s Footsteps, WhatsApp May Set Up India Office In Hyderabad

Things are not going very well for WhatsApp in India. However, WhatsApp CEO Chris Daniels, who was recently on a five-day visit to India (starting August 21) to address concerns around fake news on the messaging platform, doesn’t seem to be ready to back out.

Even as the messaging app awaits the Indian government’s approval to launch its payments platform, WhatsApp Pay, in the country, Daniels reportedly held talks with Telangana IT minister K T Rama Rao (KTR) in Hyderabad.

Daniels is said to have received a positive response and is now considering Hyderabad as a base for WhatsApp’s customer service operations.

It must be noted that WhatsApp’s parent company, Facebook, had also zeroed in on Hyderabad when its opened its first office in India — the company’s Asia hub — in 2010.

WhatsApp: On Shaky Ground In India

WhatsApp currently has more than 200 Mn users in India. Earlier this month (August 1, 2018), the government had said that WhatsApp can’t launch WhatsApp Pay till it sets up an office and recruits a team in India.

For the uninitiated, in the aftermath of the Facebook-Cambridge Analytica scandal in April 2018, in which the data of 87 Mn (8.7 Cr) global citizens (5.62 Lakh Indians among them) were leaked, the government has been implementing strict curbs on foreign companies operating in India to ensure data privacy and curb fake news.

The government has asked foreign companies such as Amazon, WhatsApp, and Google, among others, to set up local data servers in the country.

WhatsApp, meanwhile, is fighting its battle on two fronts. First, it is working on ways to curb the circulation of provocative and fake content on its platform, as directed by the government. Second, it is trying to convince the Indian authorities to allow it to launch its digital payments service — WhatsApp Pay — in the country.

To sort out the first problem, WhatsApp recently launched the ‘Forwards’ label and also reduced the limit of forwards one can send at one go to five chats. However, when asked to trace the origin of the fake news, WhatsApp took a negative stance.

As Daniels said, “WhatsApp cannot build a software to trace the origin of a message on its platform. Building traceability would undermine end-to-end encryption and the private nature of WhatsApp, creating the potential for serious misuse. WhatsApp will not weaken the privacy protections we provide.”

Sources suggested that WhatsApp has agreed to the government’s directive for data mirroring — storing data both in India and abroad. However, things may get difficult for the company if it’s asked to store data in India only.

WhatsApp Feels It’s Being ‘Singled Out’ By The Centre

Some people familiar with the matter also told ET that WhatsApp feels it is getting an “unfair” treatment by the Indian government. “WhatsApp’s regulatory compliance is at a similar level to Google’s, but WhatsApp is being ‘singled out’,” the report added.

On the other hand, the government is of the view that the launch of WhatsApp Pay and the need to curb fake news can’t be considered as separate matters. Meanwhile, its parent Facebook, too, is rolling out a payments feature on its Messenger app. Thus, there are also concerns around the sharing of data between the two, although WhatsApp has already said in earlier media statements it shares limited data of its payment service with Facebook.

Although WhatsApp has already rolled out its payment feature in India in partnership with ICICI Bank, Axis Bank, and HDFC Bank, the Ministry of Electronics and IT (MeitY) has asked the messaging platform and its partner banks to furnish more details on the payments system.

WhatsApp’s move to set up its consumer operations in Hyderabad seems like a trust-building measure, but we’ll have to wait and watch to see whether it serves the purpose and makes the Indian government soften its stand towards the company in the near term.

[The development was reported by ToI.]