Is Threema's secure chat app an answer to government overreach?
English We didn't want to deal with the authorities' regulatory mania any longer. Threema doesn't care about the conventions of the digital economy. The chat app isnt free, and doesnt store any of its users' data. The company is doing everything differently from its Silicon Valley competition and fighting back against government overreach at the same time, its provocative founder Martin Blatter tells the NZZ. Gioia da Silva, Text; Christoph Ruckstuhl, Bilder 09.07.2021, 11.08 Uhr   Back to article overview  Sharp critic, blurry portrait subject: Martin Blatter next to a roll-up banner at the Threema office in Pfffikon, June 23, 2021. Together with Manuel Kasper and Silvan Engeler, Martin Blatter founded Threema in 2014. The original idea came from Kasper, who developed the first version of the app in 2012. Initially, the messenger service only ran on the iPhone. Martin Blatter, then Chief Technology Officer at a Tamedia subsidiary, met Kasper in 2012. Shortly thereafter, Blatter wrote the program code for the Android app in his spare time. Threema really took off after Edward Snowden's revelations brought data security to the forefront of societal awareness. Threema's user numbers jumped when Facebook bought Whatsapp in 2014, and again when Whatsapp updated its privacy policy in the first half of 2021. To date, the service has been downloaded over 10 million times. In addition, about 5,000 companies use Threema Work, a collaboration service similar to Slack or Microsoft Teams. Martin Blatter is the heart and brain of Threema: Founder, CEO, developer, involved in just about everything the company does. Most CEOs get queasy when reporters show up for an interview with a photographer in tow. Not Blatter. Data protection and privacy are the guiding principles of Threema. I don't want to put myself out there, I want to put our product out there. Privacy is a human right. Everyone should be able to decide what they reveal about themselves. I'm not a fan of social media. What is presented to us there is not reality, but a make-believe world. I find that uncomfortable. That sounds like activism. I wouldn't call myself an activist. Missionary zeal is far from my mind. But I believe that privacy is important, and I want to give people a tool to protect theirs. In the EU, privacy concerns have ensured that a cookie banner pops up on almost every website. That sucks. Yeah, that failed. When politicians regulate business models they don't understand, sometimes they shoot themselves in the foot. But Threema is the best example of how consistent data protection also enables innovation. Blatters unwillingness to compromise on data protection recently took him all the way to federal court. At the end of April, Threema won a legal battle against the federal government, or more precisely, against the Swiss Post and Telecommunications Surveillance Service (PF), which carries out wiretaps and monitors the mail of criminal suspects. The service wanted Threema to store information about its customers. Right now, Threema does not collect such data. Had Blatter lost the lawsuit, he and his colleagues would have had to make major changes to the apps code. But now Threema has the blessing of the federal court. Data protection 1, government overreach 0. When it comes to surveillance, the state repeatedly gives itself permission to overstep its bounds. We are glad that the judges recognized this. It is a good sign for data protection in Switzerland. But the court awarded us compensation of only 3,000 Swiss francs [US $3,270]. That only covers a fraction of our legal costs. The PFs case made it seem like the authorities were just trying to make it harder for us to do business. We had to defend ourselves, which cost us a great deal of time and money. I haven't done a cash audit yet. But it's likely to be a five-figure sum. The charge fits the zeitgeist: The balance between security and freedom is shifting towards security. That puts your business model at risk. The votes on the Terrorism Act in June and on the Intelligence Services Act five years ago show that the majority of the population agrees with the expansion of surveillance. I accept that. Still, I find it amazing that people today put up with levels of surveillance that were scandalous 30 years ago. The secret files affair of the 1980s [in which it emerged that the Swiss federal police were keeping files on citizens, companies, and foreigners  ed.] was a drop in the bucket compared to the surveillance that is possible today. But just because the state has options doesn't mean it will use them. The authorities used their leeway to the last millimeter. And a vaguely worded law like the Intelligence Act or the Terrorism Act gives them a lot of room to maneuver. Recently, for example, it came out that the PF uses software to analyze mobile phone data which it should not have been able to obtain in the first place. This shows how the state is continually expanding surveillance: through the back door of an ostensible anti-terror law. While Blatter criticizes the authorities, he also cooperates with them. Hes forced to by law: Unlike telecom providers such as Swisscom and Sunrise, Threema does not have to store metadata. But the service still has to hand over data about its users if asked to do so by the Swiss intelligence service or law enforcement authorities. Surveillance is only authorized for investigations of serious crimes, such as drug trafficking, robbery, rape or homicide. Theft, bribery, and forgery also count. Surveillance is ordered in about 1.5% of cases. According to Threema's transparency report, you shared the information of 558 customers with the authorities in 2020. The time of the last log-in. And encrypted phone numbers or email addresses, if customers have left that information. At Threema you can also register anonymously, i.e. without a phone number or email address. Then even we don't know who's signing up. Yes. But they've been making more collection requests lately. Recently, we were asked to release information from as many as 40 contacts in an Excel file. There were many users who linked their profile to a phone number or an email address. This shows that the state also monitors people who are not guilty of anything. If they were criminals, they would try not to leave their personal data. Well ventilated: A CO2 meter in the Threema offices. That's anyone's guess. You could also say that your service protects criminals communication. No. If you argue that way, you would also have to say the post office protects criminals. Certain messenger apps are purposefully designed for criminal activity. Threema isn't. At the least, when you purchase the app in the app store, you leave certain traces. I'm not implying that you designed Threema to protect criminals. Nevertheless, the app can be used for illegal activity. Crime is a societal problem. We don't promote it. There are rotten eggs in every society. They are probably as common in our user base as they are in society as a whole. Threema recently hit the 10 million download mark. This makes the service one of the most successful apps ever developed in Switzerland. Thats a remarkable achievement for a company with only 30 employees. But Threema still serves a niche market: Customers who are willing and able to pay for privacy in the digital space. One of the biggest hurdles to Threema's wider adoption is likely to be cost. Your competition is free. Were never going to achieve the same reach as the free providers. But we have a believable business model. Many users are not aware of how much their data is worth. When the blue top dog bought the green top dog [Blatter wont utter the names Facebook or Whatsapp  ed. ], it paid about 45 Swiss francs per user. Threema can be downloaded for a one-time payment of 3 to 4 Swiss francs. This means that we are still covering our costs. Yeah, we'll see how the cost situation plays out. There will probably be a price adjustment. Threema remains affordable, however, even if we add a franc to the price. You now make 70% of your revenue from corporate customers using Threema Work, even though that segment only makes up 20% of your users. No, on the contrary. The private Threema app benefits when Threema Work is built out. The two services use the same source code. Innovations in corporate business therefore also benefit private individuals. Nevertheless, you are likely to grow, especially with corporate customers. Yes, Threema Work is our future. Nevertheless, well keep the app running for individuals. Threema Work gives us the ability to cross-fund the Threema chat app to some degree. Blatter's entrepreneurship is not primarily about making a quick buck. He has repeatedly turned down financing offers from Silicon Valley investors promising short-term growth on credit. Last autumn, however, the founders sold the majority of the service to the German-Swiss investment company Afinum. We are three founders, all software developers. This has worked well so far. But we struggle more and more with bureaucracy. From a computer scientist's point of view, administration is a particularly unproductive activity. We no longer wanted to deal with red tape, compliance requirements, and the regulatory mania of the authorities. Thats why we needed a partner with a business perspective. But you didn't have to sell the company to get that. You could have hired a business administrator. We are three computer scientists. We cannot necessarily judge the technical competence of a business manager. Afinum helped us to find a suitable sales manager, for example. Furthermore, thanks to the investor backing us, we were able to publish our source code. We couldn't have risked it without financial security. You disclosed all your intellectual property at the end of 2020. Threema became open source. We have a license on the code. Anyone who uses or modifies it must also disclose their code under the same license. But we cannot rule out abuses. Still, the disclosure was the right thing to do, because software development is a give and take. We couldn't have developed Threema in the first place without open source code from other companies. So it's our responsibility to give back to the community. New product: Threema OnPrem Threema plans to launch the Threema OnPrem service (OnPrem is short for on the premises) soon. Corporate customers can thus run the entire service on their own servers instead of Threema's. The product is to be introduced by the end of the summer and is aimed at organizations that have particularly high security requirements. The NZZ is one of the preeminent news sources in the German-speaking world, with a tradition of independent, high-quality journalism reaching back over 240 years. NZZ in English will help you gain a new global perspective with selected English-language articles on international news, politics, business, technology, and society. This test phase will help us evaluate whether NZZ in English should be continued and expanded. During the test phase, you have access to all English-language content free of charge. Please help us improve our product by sending feedback to innovation@nzz.ch. Follow @NZZenglish on Twitter to get the latest articles in English.