[Infowarrior] - Facebook under privacy microscope

[Richard Forno]

Facebook under privacy microscope

By David Gelles in San Francisco

Published: April 11 2010 19:17 | Last updated: April 11 2010 19:17

http://www.ft.com/cms/s/0/a807eaf6-4593-11df-9e46-00144feab49a.html

Regulators globally are grappling with a conundrum: how to contend with the rise of an internet phenomenon that five years ago did not exist?

Facebook, founded in a Harvard dorm room just five years ago, now boasts 400m users and is the world’s largest social networking site.

But its meteoric rise has also brought with it an increase in scrutiny from regulators and privacy advocates, who are questioning the direction in which such sites are heading.

Social networking sites by definition have courted controversy over their privacy policies, including Google’s  YouTube and Buzz, but it seems that Facebook has been the one to stick its neck out.

In December, it implemented changes that made most of its users’ personal information public by default. Last month, Facebook unveiled plans to share user information automatically with some third-party websites. “Facebook is just stuck under the privacy microscope,” says Marc Rotenberg, president of the Electronic Privacy Information Centre. “There’s almost nothing the company does at this point that doesn’t raise some privacy concerns. That has not escaped the attention of regulators in both Europe and the US.”

Yet so far, lawmakers have stopped short of introducing legislation that would directly target Facebook. For as much as Facebook is pushing the envelope by making more information public by default, it is also taking great pains to put users in control of their own information.

For example, when Facebook users post a new piece of content, they can decide whether to share that with an individual, a group or the entire web.

Facebook’s motives are not hard to grasp. By making more personal information publicly accessible, it is improving its ability to target users with highly-specified adverts. “They are pushing the envelope because it is in their financial best interest to do so,” says Augie Ray, an analyst with Forrester Research.

However, Facebook – and the rest of the social networking industry – is facing the prospect of increased regulation in Europe and the US, its biggest markets.

Facebook has already faced questions from German and Swiss regulators over its practice of allowing users to upload pictures and information about other people without their explicit permission.

Regulators say that uploading snapshots of friends may be illegal under the two countries’ stringent privacy laws. Regulators say Facebook may be forced to contact the individuals to ask if they consent. Australia, too, is considering such measures.

Meanwhile, Brussels has made it clear that privacy will be one of the key issues it will tackle. Viviane Reding, the EU’s information society commissioner, has warned social networking sites that she will not hesitate to intervene with legislation if they do not work harder to keep the profiles of minors private.

In response to the threat of increased regulation, Facebook has beefed up its lobbying presence in Europe with new staff in France and Germany.

This should help it deal with an expected increase in the volume of inquiries from country watchdogs and Brussels.

Meanwhile, in the US, Facebook and other social networking sites are also under scrutiny. The Federal Trade Commission recently concluded a series of “privacy roundtables” designed to examine how new technologies were blurring the lines between private and public information. During one, commissioner Pamela Jones Harbour criticised social networking sites for not doing enough to protect their users.

“Protecting consumer privacy is of utmost importance,” she said. “Unfortunately, many of the companies that consumers look to as leaders, and that we expect to be leaders, still have not taken this message entirely to heart.”

Last year, EPIC filed a complaint about Facebook to the FTC, citing its December changes as an example of overreach.

What is more, EPIC seems to have Washington’s ear. Responding to the complaint, David Vladeck, head of the FTC’s bureau of consumer protection, said the complaint raised “issues of particular interest for us at this time”.

Facebook has already been forced to take action in Canada. Regulators last year found it in violation of privacy laws and said it would be taken to court if it did not change. Months later, Facebook unveiled changes that addressed the regulators’ concerns.

Richard Allen, Facebook’s European director of public policy, says he is worried new laws could inhibit the development of new technologies during a time of rapid transition, while providing little new protection to the users.

“Over-detailed regulation could become outdated very quickly and may not achieve the goals of the regulators,” says Mr Allen. “The price you pay is a price of innovation.”

Meanwhile, Tim Sparapani, Facebook’s director of public policy in Washington, said that, in spite of the concerns of regulators, there is little to suggest Facebook is causing havoc by allowing people to share information online.

“There seems to be a real disconnect between the regulators and the people,” he said. “People are embracing these social technologies. They are embracing sharing with one another. The explosive growth of Facebook is proof of that.”

Instead of imposing laws to prescribe what Facebook should or should not do, Mr Sparapani said lawmakers should leave the control of personal information in the hands of the users.

Additional reporting by Maija Palmer

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