FTC complaint against Facebook filed by Privacy groups

Ten privacy and consumer groups announced Thursday they’ve filed a complaint with the U.S. Federal Trade Commission alleging that Facebook Inc.’s privacy-policy changes violate federal law.

The Electronic Privacy Information Center said in a statement that it and nine other groups are urging the FTC “to open an investigation into the recent changes made by Facebook … and to require Facebook to restore privacy safeguards.”

The online social network began informing its 350 million users last week that it would be arming them with better control of privacy settings, but also would provide default settings that could allow anyone on the Internet to see their personal information.

The move could push users to share more information to a broader audience, mirroring the structure of Twitter, the increasingly popular microblogging service. It also theoretically could create more opportunities for online marketers.

But Facebook’s privacy changes have elicited widespread criticism. EPIC said in its statement that the service “should not be allowed to turn down the privacy dial on so many American consumers,” adding that the changes “violate federal consumer-protection law.”

EPIC is joined in its complaint by groups including the American Library Association, the Center for Digital Democracy and the U.S. Bill of Rights Foundation.

In a statement, a Facebook spokesman said: “We’ve had productive discussions with dozens of organizations around the world about the recent changes, and we’re disappointed that EPIC has chosen to share their concerns with the FTC while refusing to talk to us about them.”

The spokesman, Andrew Noyes, also said that Facebook discussed its privacy program with regulators “including the FTC” prior to its launch.

Facebook was valued by its investors at over $10 billion earlier this year. The closely held company’s backers include Russian investment firm Digital Sky Technologies,

Since that debacle, marketers seem to have gotten comfortable with Facebook, and Mark Zuckerberg has a real ad business now. And I’ve yet to hear a peep from big brands with second thoughts. But if the privacy blowback gets big enough, that could change.

Again, I don’t think the proposition that Facebook is offering its users–the opportunity to share every detail about their online lives with anyone with a browser–is an inherently bad one. There are lots of people who are comfortable with the notion.

The problem is that Facebook has switched course midstream. It started off as a site that limited users’ information to the outside world and now wants to invert that. But the switch has been badly explained, done in such a way that many users don’t understand what happened.

Facebook says this criticism is overblown and that lots of people do understand the switch. Spokesman Barry Schnitt says at least half of Facebook’s users have made changes to their privacy settings since the new rules went into place. Which means, he argues, that at least half of its users understand them.

Entirely possible. But Facebook now has up to 350 million users. Which means that tens of millions of users could be unaware of what’s going on. And they’ll only find out when their party pictures or baby videos or whatever turn up on Google (GOOG).

Facebook could easily solve this by clearly explaining that its “Share With Everyone” option really does mean everyone and–crucially–making it an opt-in proposition. But then adoption rates would shrivel, and the company wouldn’t be able to pull off its goal: Making as much of the site as public as possible.

This one isn’t going away anytime soon.

EPIC’s complaint, followed below by Facebook’s response:

EPIC-FacebookComplaint -

Facebook’s response:

We’ve had productive discussions with dozens of organizations around the world about the recent changes and we’re disappointed that EPIC has chosen to share their concerns with the FTC while refusing to talk to us about them.

Facebook’s plan to provide users control over their privacy and how they share content is unprecedented in the Internet age. We have gone to great lengths to inform users about our platform changes, beginning with our July announcement; founder Mark Zuckerberg’s open letter to our 350 million users; our robust press and analyst outreach; the notice-and-comment framework for our new privacy policy; and simple customization tools for users.

We’re pleased that so many users have already gone through the process of reviewing and updating their privacy settings and are impressed that so many have chosen to customize their settings, demonstrating the effectiveness of Facebook’s user empowerment and transparency efforts. Of course, the new tools offer users the opportunity to decide on privacy with every photo, link or status update they wish to post, so the process of personalizing privacy on Facebook will continue.

We discussed the privacy program with many regulators, including the FTC, prior to launch and expect to continue to work with them in the future.

Source: marketwatch.com, mediamemo.allthingsd.com

Tags: Facebook, facebook privacy, FTC, privacy

Posted in Facebook