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FTC Launches New Inquiry Into Facebook Privacy Practices

FTC Launches New Inquiry Into Facebook Privacy Practices
By Jennifer LeClaire

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Part of the plague of free service companies is that they have to be funded with advertising and advertisers want a lot of personal information about the people on the sites so they can better target the ads. That places companies like Facebook at cross purposes with the privacy rules of government agencies like the FTC, said analyst Rob Enderle.
 


Facebook is no stranger to Federal Trade Commission inquiries. And that's a good thing, seeing as the social networking giant is facing another one.

The FTC is launching a new inquiry just days after key privacy groups asked the regulatory agency to block proposed changes to its privacy policy. Facebook in August said it would make changes to its privacy policies to bring more clarity on how it uses member data to target ads. The changes were set to go live on Sept. 5.

"Facebook never sought out a discussion with us beforehand about these proposed changes," Peter Kaplan, a spokesman for the FTC, told the New York Times. "We're monitoring compliance with the order. Part of that involves interacting with Facebook."

Fast and Loose

Consumer Watchdog, the Electronic Privacy Information Center (EPIC), the Center for Digital Democracy, Patient Privacy Rights, U.S. PIRG, and Privacy Rights Clearing House signed the letter to the FTC asking for intervention.

According to these groups, the changes will allow Facebook to routinely use the images and names of Facebook users for commercial advertising without consent. They contend the changes violate Facebook's current policies and the 2011 Facebook settlement with the FTC.

"Facebook has long played fast and loose with users' data and relied on complex privacy settings to confuse its users, but these proposed changes go well beyond that," said John M. Simpson, Consumer Watchdog's Privacy director. "Facebook's overreach violates the FTC Consent Order that was put in place after the last major privacy violation; if the Commission is to retain any of its credibility, it must act immediately to enforce that order."

Impact on Minors

The privacy groups' letter said that the proposed changes' "impact on minors is particularly pernicious." In the proposed policy Facebook asserts:

"If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to the terms of this section (and the use of your name, profile picture, content, and information) on your behalf."

"Such 'deemed consent' eviscerates any meaningful limits over the commercial exploitation of the images and names of young Facebook users," the groups wrote.

Facebook Responds

"We routinely discuss policy updates with the FTC, and this time is no different," Jodi Seth, a Facebook spokeswoman, told The Times in a statement. "Our updated policies do not grant Facebook any additional rights to use consumer information in advertising. Rather, the new policies further clarify and explain our existing practices."

We asked Rob Enderle, principal analyst at The Enderle Group, for his take on the latest FTC inquiry. He told us it's part of the plague of free service companies -- they have to be funded with advertising and advertisers want a lot of personal information about the people on the sites so they can better target the ads.

"That places companies like Facebook at cross purposes with the privacy rules of various governments," Enderle said. "So you are going to see this play out probably very painfully for a variety of firms but both Facebook and Google will likely be the canaries in the coal mine because of their size."
 

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