While the move will help Facebook offer more targeted advertisements on its own platform, WhatsApp will continue to be ad-free, a WhatsApp spokesperson said.
Privacy advocates had raised concerns that Facebook would start mining WhatsApp accounts for data. However, both the companies have maintained that WhatsApp would operate separately from the parent company and that its user data would not be shared without users' consent.
WhatsApp has over one billion users globally, with a significant chunk coming from India. Facebook also runs photo-sharing platform, Instagram.
"As part of the Facebook family of companies, WhatsApp receives information from, and shares information with, this family of companies. We may use the information we receive from them, and they may use the information we share with them to help operate, provide, improve, understand, customise, support, and market our services and their offerings," the spokesperson said.
He added this helps improve infrastructure and delivery systems, secure systems and fight spam, abuse, or infringement activities.
WhatsApp will begin to "coordinate" accounts with Facebook by sharing WhatsApp users' mobile phone numbers and device information like the type of operating system and other details about the smartphone, he said.
This means that if a person has the apps of Facebook and WhatsApp installed on the same device, even with different phone numbers, Facebook will now be able to map the two in the background using the basic device information.
"However, it is important to note that WhatsApp messages will not be shared onto Facebook for others to see nor will it be shared with third parties. In fact, Facebook will not use user's WhatsApp messages for any purpose other than to assist
us in operating and providing our services. The communication on Whatsapp will continue to be encrypted end-to-end," he said.
Asked about how Facebook will use the information, the spokesperson said: "We may use the information on Facebook for things like making suggestions about friends, content or showing relevant offers and ads."
Another important change in the policy is that businesses will now be allowed to create accounts on WhatsApp.
The spokesperson said the focus will remain on ensuring that users are not spammed and that users can block such messages adding that "WhatsApp will continue to be ad-free".
Current users will have up to 30 days to accept the new policy terms. Once they accept, they would have 30 more days to opt out of sharing with Facebook.