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I'm trying to find out if installing WhatsApp will send the information of all my contacts to Facebook. The Usage of your phone number and address book FAQ page is not clear about that.

I can deny the app access to my contact list but that is counterproductive to using it. It's fine if WhatsApp accesses my contact list but I want that information to stay 'in my phone'.

Just as I do not allow Google or LinkedIn to collect my contact list, I also want to prevent my friends' information ending up in the Facebook databases (through me). After all, my friends never gave permission for that.

This is what the FAQ says about Usage of your phone number and address book, but that still does not answer my question:

WhatsApp users do not have access to your address book information, unless you share a contact using the "Share Contact" feature in a chat. We value your privacy and we have not, do not, and will not ever sell your personal information to anyone. If you would like to learn more, please take a look at our Privacy Policy that helps explain our information practices.

WhatsApp uses the phone numbers from your phone's address book to provide you an up-to-date list of WhatsApp users you know to make it easier for you to message them via WhatsApp. WhatsApp regularly looks at the phone numbers in your address book and then checks to see which of those numbers are verified in WhatsApp. During this entire process, phone numbers are sent to WhatsApp for lookup, securely, over an encrypted connection. So that you know who you are chatting with, the app then displays the names from your address book.

Maybe superfluous to say: I do not have Facebook/Messenger installed on my (Android) phone.

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(Partially answering my own question)

The privacy policy section Information We Collect states:

You provide us the phone numbers in your mobile address book on a regular basis, including those of both the users of our Services and your other contacts. You confirm you are authorized to provide us such numbers.

Note that last sentence that you have to agree with.

So this answers that 'we'=WhatsApp Inc collects the information from my contact list. In how far this is passed on to 'Facebook' is unclear:

WhatsApp is part of the Facebook family of companies, and sharing some information allows us to coordinate more and improve experiences across our services and those of Facebook and the Facebook family.

Update March 2018, quoting from the NakedSecurity blog by Sophos:
Facebook: we won’t share data with WhatsApp (yet)

WhatsApp can’t share user data with parent Facebook without breaking the upcoming General Data Protection Regulation (GDPR), so it won’t.

It’s signed a public commitment not to share personal data with Facebook until data protection concerns are addressed

So it seems that they don't but still want to if they can make it legally possible. No suprise there.

The blog post gives a good overview of past facts and intentions, including a reference to that March 2018 'public commitment' document signed by WhatsApp.

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  • I believe personal data is the content of the conversation, and not your contacts. I'm sure they're passing the contacts, though I don't have any real reference. More than one time, I got a WhatsApp message from someone at my university, and shortly after Facebook would suggest him as a friend to add. I haven't even responded to the message yet, nor added the contact to my list. So, I'm sure they pass all this information.
    – arieljannai
    Commented May 6, 2018 at 10:24
  • @arieljannai Indeed, I just heard the same anecdote from someone else today.
    – user55949
    Commented May 6, 2018 at 16:55
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Update: It seems that the answer is a strong NO. You can't prevent it.

Third Parties. WhatsApp may transfer data within the Facebook family of companies and to third parties, including service providers and other partners. ...

But by coordinating more with Facebook, we'll be able to do things like track basic metrics about how often people use our services and better fight spam on WhatsApp. And by connecting your phone number with Facebook's systems, Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them. For example, you might see an ad from a company you already work with, rather than one from someone you've never heard of. You can learn more, including how to control the use of your data, here.

In short, Facebook owns WhatsApp - you can't prevent it.

Especially after the second co-founder Jan Koum left Facebook (Brian Acton had already left) over disagreements about user and data privacy:

From WhatsApp blog, announcing partnership with Facebook:

Respect for your privacy is coded into our DNA ... If partnering with Facebook meant that we had to change our values, we wouldn’t have done it

So, it seems they didn't want to change WhatsApp and their values regarding privacy, and believed it could be kept separate with minimal interference from Facebook.
But now, none of them remains at the company, and nothing can be guaranteed. Especially given Facebook's history concerning privacy and data.

Collecting personal data

When they say that they don't share or collect personal data, I believe they are referring to the conversation content, and not your contacts.
I'm sure they're collecting the contacts, though I don't have any compelling evidence.

Example:

  • More than one time, I got a WhatsApp message from someone at my university, and shortly after Facebook would suggest them as a friend. I hadn't even responded to the message at that point, nor added the contact to my list. So, I'm sure they pass all this information and anything they can get.

Some content inserted from my comment

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the only way you may prevent it would be to use one unique phone number for WA and a different phone number email and version of your own name for FB

so you break the chain

but might be too cumbersome for many people

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