Facebook Inc (FB) Faces New Privacy Concerns

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As we wrote last week, Facebook Inc (NASDAQ:FB) finally settled with millions of users for using their pictures and names in third-party advertising as well as “Sponsored Stories.” Ultimately, the settlement will cost Facebook peanuts, $20 million, and those that took the time to join the class action suit will each see $15.

Facebook Inc (FB) Faces New Privacy Concerns

Facebook’s terms of agreement

The move prompted Facebook Inc (NASDAQ:FB) to change its terms of service, but not its practices. Essentially, Facebook said, “We’re going to use your name and photos and if you don’t agree, well, close your account.”

Now, Facebook Inc (NASDAQ:FB) is facing another fight due to this policy change, as privacy groups are taking aim at how this covers those under the age of eighteen.

In a joint letter sent by the top six U.S. privacy organizations to the Federal Trade Commission yesterday, the groups argue that this data-use policy violates the terms of a 2011 privacy settlement Facebook made with the FTC.

“This is a data power grab by Facebook, designed to enable it to gather more information about what users do on their mobile devices and to allow their ever-growing third-party marketers to target Facebook users,” said Jeff Chester, executive director of the Center for Digital Democracy, one of the signatories to the letter. “They’re purposely being disingenuous with users about what this really means.”

Consumer protection charges

While the letter was sent to the FTC, it was also copied and sent to members of Congress charged with consumer protection and those that oversee commerce committees. The groups claim that Facebook Inc (NASDAQ:FB) is being “particularly pernicious” when it comes to minors. The new policy essentially asserts that parents have given Facebook the “green light” to use their child’s name, profile photo and other content for advertising purposes.

“Such ‘deemed consent’ eviscerates any meaningful limits over the commercial exploitation of the images and names of young Facebook users,” the advocates wrote. “This is contrary to the FTC’s recognition that teens are a sensitive group, owed extra privacy protections.”

The letter also restates the groups’ belief that Facebook Inc (NASDAQ:FB) should allow users to “opt in” to this commercial use rather than limiting the ability for users to “opt out.”

Facebook changes are purely linguistic

Facebook insisted the changes were purely linguistic: “We have not changed our ads practices or policies – we only made things clearer for people who use our service.” Or, “We know, and we don’t care.”

Last week, the company said it would accept user feedback on the proposed changes for seven days before enacting the new policy on September 5. The groups also took issue with this, saying that it amounted to a “Labor Day Surprise,” that limits the amount of time users had to give their feedback regarding the new policy.

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