Thursday, May 27, 2010

Facebook's Privacy Issues

PALO ALTO, Calif. – Facebook Inc. simplified its privacy settings Wednesday in an effort to assuage lawmakers, regulators and privacy watchdogs who have criticized the world’s most popular social networking site for being reckless with the personal information of its more than 500 million users.

But some analysts said the move may not temper heightened regulatory scrutiny of how Facebook and other Internet companies gather and use the huge volumes of information that people share online.

Facebook has found itself in the eye of a regulatory storm as it has pushed users to make more of their personal information public.

At Facebook’s Palo Alto headquarters, the company’s 26-year-old chief executive, Mark Zuckerberg, said the overhaul of the site’s settings would offer more privacy to users who want it. They will work retroactively to include all of a user’s content and will apply to all new services that Facebook introduces.

Facebook is also making it easier for users to block features that give third-party websites information about them. That includes the “instant personalization” feature Facebook rolled out last month that shares user data with music site and review site

But Facebook stopped short of making all user data private by default, as privacy watchdogs and U.S. lawmakers have urged it to do.

“Facebook made some positive changes today, but only because of political pressure from policymakers and privacy advocates on both sides of the Atlantic,” Jeffrey Chester, who heads the Center for Digital Democracy, said. “Mr. Zuckerberg’s failure to acknowledge the political realities don’t bode well for Facebook’s future approach to privacy.”

Chester said he would continue to press the Federal Trade Commission to investigate Facebook.

Last month, 15 consumer groups filed a complaint with the FTC.

Officials from 30 European countries also complained in a letter to Facebook.

“Those who said that ‘privacy is dead online’ were 100 percent wrong. This episode makes clear that users care very much about privacy. Facebook has learned that lesson,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, or EPIC.

Facebook is not the only Internet company under fire: Google Inc. is grappling with the fallout in the U.S and Europe after it collected private data from Wi-Fi networks on its Street View service. Yet these Internet companies remain wildly popular with Internet users around the globe.

Despite the pushback from staunch critics, Zuckerberg said Facebook had not seen any decline in users. Facebook had 519.1 million users last month, up from 411 million in September, according to ComScore Inc. Analysts said most users are wedded to Facebook and have no intention of leaving. Tens of millions of users would have to protest – not thousands – before having an effect on Facebook, they said.

Zuckerberg said he believes many users would still make their personal information visible to everyone on the Internet and they would use the instant personalization service, which customizes websites based on their interests and friends.

Facebook will begin rolling out the new settings over the next two weeks. The move comes after weeks of intense meetings at the company as executives plotted how to respond to complaints in the U.S., the European Union, Canada and Norway.

“It’s not true that we don’t care about privacy,” Zuckerberg said.

“What I am saying is that I think there is a balance. More and more people want to share information. As long as we have good controls over that, I think that’s really where the world is going.”

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