Skype and WhatsApp face tougher EU privacy rules

Telecom companies have long complained that web-based competitors such as Google, Microsoft and Facebook - which offer communications services Skype, WhatsApp and Hangouts - enjoy an advantage because they are allowed to make money from traffic and location data, which telecoms operators are not allowed to keep.

Scrapping the rules would encourage innovation and drive growth and social opportunities, telecoms lobby group GSM Association had said.

Instead, the European Commission intends to bring in everyone under the same rules. According to UK newspaper the Financial Times, the EU executive’s move is an attempt to rein in American companies that dominate the sector, undercutting EU telecoms providers.

Whether the rules will strengthen consumers’ privacy is open for debate. Some internet companies offer end-to-end encryption on their services.

Facebook, which uses full-scale encryption on WhatsApp, said in its response to the Commission's public consultation that extending the rules to online messaging services would mean they could in effect "no longer be able to guarantee the security and confidentiality of the communication through encryption".

They send the new regime would allow governments the option of restricting the confidentiality right for national security purposes.

The commission is due to make an initial announcement in September and present detailed plans for legislative review later this year.