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MailChimp app pulled from Shopify store over data sharing disagreement

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MailChimp is shutting down its popular integration with Shopify, the former said in a statement on Friday.

Atlanta-headquartered MailChimp said it asked Shopify to remove its MailChimp for Shopify integration from the e-commerce platform’s app store over concerns that Shopify’s updated partner terms of service “jeopardize our users’ privacy and require us to hand over customer data acquired outside of Shopify.”

MailChimp said the data-sharing provisions of the new terms are set to take effect on May 12, and that it had been working with Shopify “for months” on the issue. It also said that the rules “make it clear that Shopify wants to control which providers their partners work with and how they conduct their business.”

The MailChimp for Shopify app is no longer available in the Shopify App Store, Shopify said in a statement posted to its website. The e-commerce platform said it had growing concerns over the past 18 months about Mailchimp’s “poor merchant experience and their refusal to respect” Shopify’s partner agreement.

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Shopify said MailChimp was refusing to “synchronize customer information captured on merchants’ online stores and email opt-out preferences,” potentially preventing Shopify users from complying with privacy laws.

MailChimp did not answer questions about how Shopify’s new terms jeapordize users’ privacy. Both companies responded to requests for comment by directing The Logic to their statements.

This is not the first time the integration has been an issue. On Nov. 19, 2018, some Shopify users complained on its support forums and on Facebook groups that MailChimp for Shopify had disappeared from Shopify’s app store. Shopify store owners suggested that the removal was related to MailChimp’s partnership with Square, which allowed MailChimp users to add e-commerce features to their landing pages.

The integration returned to the Shopify App Store on November 22.

Shopify did not answer questions about whether the November outage was the result of MailChimp’s partnership with Square or the number of merchants using MailChimp for Shopify. One source familiar with the company said that number was at least 30 per cent. MailChimp has a 61.8 per cent share of the email marketing market according to Datanyze, a technology tracking platform.

Store owners expressed concern about the loss of MailChimp for Shopify on social media. Vincent and Barn, a British furniture retailer, tweeted, “Pretty disappointed with the statement received from @Mailchimp today, this is the second company (@semrush being the other) that are having problems working with Shopify! Come on Shopify, support our small businesses by cooperating with these other companies.” And, My Fluffy Puffs, a Boston-based haircare brand, tweeted “If Mailchimp is leaving Shopify there’s a huge gap to fill with supporting apps.”

MailChimp is a popular platform and a “non-trivial number” of Shopify merchants use it, said Nikhil Thadani, an analyst who covers technology stocks at Mackie Research. “But I’d be pretty surprised if a bunch of merchants leave the Shopify platform because of this.”

While MailChimp for Shopify may no longer work, there are third-party services that could allow merchants to keep using the two tools together, he noted. MailChimp put out a resource list for users affected by the change, identifying ShopSync, Zapier and Automate.io as alternate options.

Suthan Sukumar, a principal for technology research at Toronto’s Eight Capital, said he doesn’t “view this as material.” He noted that there are other email marketing services available on Shopify in addition to the third-party workarounds for merchants who want to stay on MailChimp, so s likely to be “limited impact [or] disruption to end users.”

Shopify’s new terms of use for its application programming interface—the technology that enables third-party apps—are set to take effect on May 12. Under them, certain types of customer data—including names, emails, phone numbers and addresses—must be stored on the e-commerce platform for merchants to access. The list of customer data that must be transmitted includes a category for whether the customer accepts marketing.

MailChimp and Shopify disagree on the data sharing requirement.

“From our perspective, that’s not our data to share,” MailChimp said in its statement. Shopify said, “The data captured on behalf of our merchants belongs to those merchants,” and that MailChimp’s refusal to synchronize data from stores prevents merchants from having “accurate, complete insight into their businesses and customers.”

Thadani said there’s merit to both companies’ positions, and other tech observers said likewise on social media. “I think [it] is reasonable that Mailchimp doesn’t want customer data running through shopify API and it’s reasonable for Shopify to want the system to be unified for the merchant,” tweeted Justin Overdorff, a business development and partnerships lead at Stripe, which processes transactions made through Shopify Payments, a key growth area for the e-commerce company.

Shopify’s stock was down 1.60 per cent as of mid-afternoon trading, but Thadani noted that most markets are also in the red. The S&P TSX/Composite had lost 1.01 per cent at the same point in the day. “Shopify usually tends to move more than the market, anyways, and the stock has had a massive run-up, as well, since Christmas,” said Thadani. He noted that the stock also dropped after Instagram launched its checkout feature on Tuesday.

MailChimp has ramped up its e-commerce focus recently. Earlier in March, Vancouver-based online store platform LemonStand announced it was shutting down, and both CEO Danny Halarewich and CTO Bruce Alderson joined MailChimp.