Privacy by Default: Why Facebook is Opposed

Posted on Monday, May 23rd, 2011 by Print This Post Print This Post

Categories - Featured, News, Social Media

As many are already familiar, Facebook just admitted it was responsible for a PR effort to plant negative stories in the press about Google and its cavalier attitude toward user privacy. Google was quick to point out that Facebook has come under fire for this very same issue. But behind this recent back-and-forth, is the hot button issue of privacy protection, and California’s first-of-its kind proposal –  SB242 – to regulate social media sites, beginning with mandating new privacy policies.

Facebook may have brought this renewed interest in industry regulation upon itself when, in December 2009, it made all private data available to the public with no prior notification to subscribers, and more recently for its plans to disclose users’ home addresses and mobile numbers to third party application developers.

State Senator Ellen Corbett, sponsor of SB242, says “You shouldn’t have to sign in and give up your personal information before you get to the part where you say, ‘Please don’t share my personal information.’”  Under the California proposal, it would be required for a “social networking Internet Web site to establish a process for new users to set their privacy settings as part of the registration process that explains privacy options in plain language, and to make privacy settings available in an easy-to-use format”. In other words, Facebook and other companies would have to allow users to establish their privacy settings at the creation of an account instead of after joining, or risk paying a steep fine. This seems reasonable enough, so why is Facebook, along with a coalition of industry associations and internet companies (including Google, Twitter, Zynga, Match.com, and Skype) so opposed to making the privacy settings more transparent to users?

Here’s a summary of the group’s oppositions (By author Liz Gannes):

  • Asking users to make privacy choices at the outset–the group calls this “privacy shrink wrap”–will result in bad and overly broad decisions. The Federal Trade Commission recently said that it is best practice to ask users to make privacy decisions on an item-by-item basis so they can understand the context.
  • Users are already setting their privacy settings themselves, and don’t seem to have had problems with social networks failing to remove content after it’s been requested.
  • Many social networking companies are based in California, and implementing these practices would significantly impact their businesses at a time when the state’s economy is in shambles.
  • SB 242 is unconstitutional because it interferes with freedom of speech and interstate commerce. Quote: “By hiding from view all existing users’ information until they made a contrary choice, the State of California would be significantly limiting those users’ ability to ‘freely speak, write and publish his or her sentiments on all subjects.’”

Aside from the obvious point that no industry likes to be regulated, the third bullet is perhaps the biggest reason for concern for the companies in question. In addition to requiring a more transparent privacy policy, the bill would also require “various prohibitions with regard to disclosures of personal information related to, among other things, driver’s licenses, social security numbers, and direct marketing”.

Facebook’s business model and revenue stream relies heavily on data mining its users’ personal information and repackaging and selling that information. Limiting user participation in this process would greatly affect Facebook’s bottom line. Google and other companies have the same concerns, which creates the odd arrangement of Facebook and Google fighting it out in the press, but allying with one another to stop this legislation.

So the bigger questions are:

  • How much privacy is someone willing to give up in order to use a social networking site?
  • How does a social marketing site ethically use someone’s personal information for marketing purposes?

The California legislation intends for Facebook to be completely up front about how it plans to use someone’s personal information so a user can make an informed decision to decline or accept the terms of service.  Some users may welcome demographically targeted ads and games, while some may prefer to use the service solely for keeping in contact with friends and family. As data mining and micro-targeted advertising becomes a larger and larger share of online revenue, this issue will become more and more prominent for all parties concerned.

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2 Responses to “Privacy by Default: Why Facebook is Opposed”

  1. Ben Altieri says:

    On the one hand, Facebook and any of the other destination social networks, want to own the content that its users upload. And on the other hand, a band of these destination social networks, one of them being Facebook, are trying to prevent regulation that would force them to make it clear to its users about privacy concerns to include this complete relinquishment of control of the information they (the users) hand over to the social networks. So, the contradiction I see there is that they (the social networks) really shouldn’t be allowed to have it both ways. They shouldn’t be allowed to stake claim to all data its users submit and then out of the other side of their mouths argue that there shouldn’t be any legislation forcing them to make that distinction clear with its users. One or the other. Pick one. Can’t have both. Personally, I’d still rather not see this legislation pass either. And the simple reason is that sooner or later, a certain amount of people will become sick and tired of this issue and will find or create solutions that give them more control. Sure the destination social networks can make the argument all they want. They won’t be able to complain once better, more user respecting solutions become more widely available. There are plenty of solutions already available. Just that most people aren’t willing to pay the price of running their own blog at the expense of not getting near the amount of traffic. But there’s ways of working around that. I don’t want to see any of them shut down. Let them exist as they are without this legislation. People can and will govern themselves eventually.

  2. Ben Altieri says:

    Its better to just put up a blog about yourself on your own domain and let people find you using google or any other search engine that respects that the idea that the Internet is larger than any one organization.

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