Facebook tracking now under federal investigation

Facebook tracking triggers another round of criticism for the social network. This time, the FTC is offering the company a settlement over a legal complaint, while a Senate committee starts to ask: is Facebook tracking both users and non-users?

Facebook tracking has become a perennial privacy issue, but this time, the US Federal Trade Commission is involved.

Last week, the FTC offered the social-network giant a settlement over a complaint that it had harmed users by changing privacy settings without warning. Under the settlement, Facebook would have to receive explicit permission from users before it shares any data collected under new terms – in essence, a repudiation of its hitherto standard of "opt-out" privacy changes. Now, users will need to "opt-in" to new changes.

The FTC first began investigating Facebook back in December 2009, after the Electronic Privacy Information Center (EPIC), a consumer advocacy group, complained that Facebook had harmed its users by changing privacy settings in a way that encouraged them to reveal their names, photos, gender, and other personal information.

Many Facebook denizens will remember this part of the story: in the process of rolling out an update that year, Facebook made a number of changes to its privacy settings. By default, users were automatically opted in to these new settings, which in most cases loosened restrictions on how widely personal data was shared. Everybody had the option to opt out – but in practical terms, the menus to do so were often buried deep in a confusing maze of privacy settings. EPIC complained that Facebook users weren’t given adequate notice of the changes.

EPIC’s complaint accrued supporting signatures from the American Library Association, the Consumer Federation of America, and seven other consumer-rights groups, and succeeded in bringing closer government scrutiny of Facebook’s privacy practices. And now the FTC is offering Facebook a settlement aimed at addressing EPIC’s concerns.

What would the settlement mean for Facebook users? Under its terms, you’d have to give Facebook express permission to share data in a way that’s different from what you agreed to when the data was originally posted. If the settlement is approved, Facebook will also undergo an annual independent review of its privacy practices for the next 20 years.

At the same time that this legal wrangling is going on, Sen. Jay Rockefeller (D-WV), the chairman of the Commerce, Science, and Transportation Committee, has his eye on another apparent Facebook privacy leak. Rockefeller announced that he would hold a hearing to investigate reports that Facebook can track its users’ online activity even when they’re logged off the social network. USA Today reports that Facebook can even keep tabs on non-members and the sites they visit – if they stop by a Facebook Web page for any reason.

The data Facebook collects enables online ad companies to create highly-targeted ads. So from a business standpoint, it makes sense for Facebook to be able to amass data about its users. But privacy advocates are pushing hard for “Do Not Track” technologies that would allow consumers to stop social networks and ad companies from knowing their online activities. The FTC settlement, and Sen. Rockefeller’s hearings, could help frame online privacy concerns more clearly until legislation dealing with the issue passes.

What do you think about Facebook’s privacy policy – and its apparent ability to track people’s browsing habits? Reasonable? Invasive? Sound off in the comments section below.