The recently updated documents also reflect many newly rolled features, like end-to-end encryption, WhatsApp Calling, and messaging tools such as WhatsApp for web and desktop.
Though the most notable change was with regards to Facebook, as the company said the update is "part of our plans to test ways for people to communicate with businesses, [while still giving you an experience without third-party banner ads and spam] in the months ahead."
More specifically, the new agreements allow wide sharing of data between the Facebook platform, WhatsApp, and other Facebook-owned companies.
By coordinating more with Facebook, your 'end-to-end' encrypted messages stay private and no one else can read them excecpt you. The encryption is on by default on latest WhatsApp versions.
However, they'll able to track basic metrics about how often people use the service and fight spam on WhatsApp. Additionally, if you've an account with them, Facebook system by knowing your WhatsApp number will offer "better friend suggestions" and show you more "relevant ads", the company said.
The company in the next few days will be asking everyone to tap 'Agree' to accept the updated terms [on the latest WhatsApp versions]. However, if you are not comfortable, you can choose to opt-out of this data sharing.
To opt-out, when you gets a prompt to agree to the new terms, tap the "read more" at the bottom. You will then see a checkbox that reads:
"Share my WhatsApp account information with Facebook to improve my Facebook ads and products experiences. Your chats and phone number will not be shared onto Facebook regardless of this setting."
…next untick this check box will disable sharing data with Facebook.
What if you've already agreed to terms? Luckily you still have 30 days from the date of agreeing to opting out. Head over to Settings -> Account -> Share my account info ->untick the box.
Read the full WhatsApp FAQ.
Update 08/28: The UK's Information Commissioner, Elizabeth Denham, responded to these changes stated:
Denham decided it best to investigate further into the new arrangements because of the sheer number of people who might be affected by the changes. Her statement reads:
"Our role is to pull back the curtain on things like this, ensuring that companies are being transparent with the public about how their personal data is being shared, and protecting consumers by making sure the law is being followed."
"We've been informed of the changes. Organisations do not need to get prior approval from the ICO to change their approaches, but they do need to stay within data protection laws. We are looking into this."
From the ICO post.