WhatsApp, Italy's most popular messaging platform, said on Jan. 4 it reserved the right to share some data, including location and phone numbers, with Facebook and its units such as Instagram and Messenger.
The move has sparked protests among users in Italy and elsewhere, and prompted many to opt for rival services such as Signal or Telegram.
"The authority believes it was not possible for users to understand what kind of changes were being introduced, nor how data would be treated after Feb. 8," the authority said in a statement.
The Italian data authority said it would look carefully into Whatsapp's policy disclaimer to assess its compliance with privacy data rules, adding it stood ready to urgently intervene.
It also said it had brought the issue to the attention of European Data Protection Board (EDPB).
A spokeswoman for WhatsApp said the company was looking into the authority's position in relation to the updated privacy disclaimer.
"We want it to be clear that the changes ... do not affect the privacy of messages exchanged with friends or relatives ... the update makes it more transparent how we gather and use data," she said.
(Reporting by Elvira Pollina; Editing by Alex Richardson)