On June this year, Facebooks chief executive, Mark Zuckerberg, announced, on his social networks, the launch of yet another feature of the WhatsApp application, namely the payments feature offered by Facebook Pay in Brazil, through the use of debit or credit cards from financial institutions (Banco do Brasil, Nubank and Sicredi), in the Visa and Mastercard networks, in partnership with Cielo, a payment processing company.
However, on June 23, the payments service via WhatsApp was suspended, through a decision by the Central Bank of Brazil ("BC"), according to which it is essential that the regulatory agency analyzes the new method of payments/financial services that was launched through the WhatsApp application, under penalty of the occurrence of transactions that may cause irreparable damage to users and the Brazilian financial system. The reasoning of the BC is based on art. 3 of Circular No. 3,682/2013, amended by Circular No. 4,031 of June 23, 2020, which establishes that, if the Central Bank considers that a particular payment arrangement offers risk, this may be regulated or changes may be imposed.
In addition, the WhatsApp payments service was suspended by the Brazilian Antitrust Authority (“CADE”), through a precautionary measure taken in an administrative proceeding alleging that Cielo already has a large financial market share and that, together with a base of millions of WhatsApp users, it could represent significant market power, harming competition, a factor that is essential to keep the market operating on a regular basis. WhatsApp has also positioned itself, pointing out that the initiative would be extremely relevant in times of pandemic, as well as it would help micro and small companies, in addition to expressing interest in working in partnership with the Central Bank, including in support of innovation projects of the body, such as the PIX (instant payment system). Although the administrative process with CADE is in progress, the precautionary measure that suspended the partnership between Facebook and Cielo was revoked on June 30 to enable payments via WhatsApp, understanding that the information presented mitigate the possibilities of irreparable damage in the markets affected by competition.
Among the concerns of BC and CADE, we see market competitiveness, the efficiency of the service and financial transactions, the protection of personal data and the privacy of the data subjects/users of the arrangement, considering that it is a company that is primarily foreign. Such questions are very valid, especially considering the current context of the COVID-19 pandemic, in which technological transformation, which until then was already a relevant topic, has became central in all sectors of the society, industry and Government.
With regard to privacy and the protection of personal data, the concern is also legitimate. When developing a new application or feature, it is necessary to consider the effects that innovation will bring to users, data subjects, in an unfolding beyond the market, competitive and economic aspect. We are here talking about the impacts on the individuals themselves and on their personality issues, which is why the adoption of privacy by design mechanisms is so necessary.
Ann Cavoukian, in The 7 Foundational Principles, wisely teaches that the concept of privacy by design, developed in the 90’s, must be thought not only as compliance with a regulation or law, but mainly as the standard to be adopted in an organization, and that its principles must be applied according to the sensitivity of the data, listing the financial data as a central point of attention.
Among the 7 principles idealized by Cavoukian, respect for users’ privacy, placing them at the center of the business, is the one that best relates to the case in question. According to her notes, the development of a technology needs to put the interests of the data subject in the foreground, guiding all conduct in strong privacy standards.
But there is more. The discussion on privacy and data protection in relation to the WhatsApp payments service also illustrates the pressing need for action by the Brazilian´s National Authority (“ANPD”), as an important actor in the process of articulation between sectoral regulation and specific legislation. Here, an open discussion between ANPD, Central Bank and CADE could have resulted in a great advance for the society, with the delivery of a mechanism approved by all the fronts involved. But it was not the case.
The payments service via WhatsApp remains suspended by the BC, which may require clarification and even propose changes so that the system can operate in Brazil again, according to principles such as efficiency, inclusion, competition, modernization/innovation, digitalization of services, as well as the guiding principles of data protection and privacy, such as transparency, security, purpose, accountability. These driving aspects will be essential for the implementation process and the success of the proposed features and innovation solutions, as well as for their recognition before other countries and adherence by society, companies and partnering financial institutions.