Brazil Freezes Facebook Funds Over WhatsApp Dispute

Published: July 1, 2016 8:56 PM /


Legal Tech Header Large

Facebook is once again in trouble in Brazil. A Brazilian court has frozen Facebook's bank accounts in the country, preventing the transfer of 19.5 million reais to the company, or about $6 million. The accounts were frozen because Facebook subsidiary WhatsApp will not turn over communications relating to a drug smuggling investigation. The court punished WhatsApp's parent company because WhatsApp itself has no bank accounts in Brazil.

According to Brazilian police, investigators were seeking messages sent to and from members of a cocaine smuggling ring. The police claim that without the messages it will be difficult to prove connections between the members under investigation and those who have already been captured in raids. Because WhatsApp failed to turn over the communications after 5 months, the judge finally ordered the accounts to be frozen. The total funds that were blocked are said to be equivalent to the unpaid fines WhatsApp has accumulated from its noncompliance.

Brazilian courts have targeted Facebook and Whatsapp multiple times recently. Earlier this year, a Facebook executive was arrested, but he was soon released when the arrest order was overturned by a higher court. WhatsApp has also been blocked multiple times in the country. The most recent blocking order was supposed to last 72 hours but only lasted about a day because the order was overturned by a higher court. All of these incidents stem from WhatsApp not turning over communications to law enforcement when ordered to do so by a judge, although not all are connected to the same investigation. Based on the previous incidents, it seems very likely the freezing of accounts will also be overturned by a higher court.

Facebook and WhatsApp have both argued that the messaging service doesn't store client messages and even if it did, the messages are encrypted, so WhatsApp has no way of giving law enforcement the messages it is asking for.

Has the Brazilian court made a mistake by freezing Facebook's bank accounts? Leave your comments below.

Have a tip, or want to point out something we missed? Leave a Comment or e-mail us at

No author image supplied
| Senior Writer

I’m a technology reporter located near the Innovation District of Kitchener-Waterloo, Ontario.