A Facebook executive arrested by Brazilian authorities was released Wednesday after spending a day in custody over a data dispute.

Diego Dzodan, Facebook vice president for Latin America, was arrested Tuesday after the company failed to provide WhatsApp user data for a drug-trafficking investigation, according to Reuters. Brazilian authorities told the news agency that Dzodan was being held for questioning after a court order.

An appeals court overturned the order to arrest Dzodan, Reuters reported.

"Diego's detention was an extreme, disproportionate measure, and we are pleased to see the court in Sergipe (Brazil) issue an injunction ordering his release," a Facebook spokesperson wrote in an email to CNBC. "Arresting people with no connection to a pending law enforcement investigation is a capricious step and we are concerned about the effects for people of Brazil and innovation in the country. We remain willing to address questions Brazilian authorities may have."

The arrest follows the heated U.S. debate over privacy and encryption after Apple refused an FBI demand to unlock an iPhone used by one of the San Bernardino terrorists.

A WhatsApp spokesperson told CNBC that the information that Brazilian authorities requested is not available. Dynalink CEO Larry Fishelson, however, told CNBC that he remains skeptical.

"It should be sitting there on the servers," Fishelson said in an email. "A company the size of WhatsApp and Facebook have this info stored for a long time. They are in the advertising business. They keep info for advertising targeting purposes."

A WhatsApp spokesperson said that the company doesn't store message content on the its servers, but declined to comment on exactly what information was requested by Brazilian authorities.

WhatsApp does obtain personal information on its users, however, including phone numbers, billing information and mobile device information, according to the company's privacy policy.