Facebook settles privacy complaint, agrees to ask permission for privacy changes

Facebook has settled a complaint by the Federal Trade Commission that the social networking giant deceived consumers by promising privacy protections while it shared and made user data more public, according to the FTC.

The FTC said in a release Tuesday that Facebook settled eight counts of privacy violations stemming from December 2009. The company will not face monetary fines but has agreed to change its privacy policy to first ask users’ permission when it changes the way it shares data. Facebook, with 700 million global users, will also undergo periodic audits of its privacy practices for the next 20 years.

"Facebook is obligated to keep the promises about privacy that it makes to its hundreds of millions of users," said Jon Leibowitz, chairman of the FTC. "Facebook's innovation does not have to come at the expense of consumer privacy. The FTC action will ensure it will not."

The announcement comes as Facebook reportedly is preparing an initial public offering for the second quarter of next year. Privacy scrutiny by federal enforcement officials has weighed on the company's business prospects, analysts say, and the settlement will clear the way for the stock offering.

The FTC’s complaint against Facebook stems from a complaint originally filed by the Electronic Privacy and Information Center in December 2009, when the firm announced several changes to its site that made some user profile information public.

The actions enraged users who complained on the site and on other social media services that they weren’t given enough notice about the changes in policy and that hiding their information from strangers became more difficult and confusing.

The FTC said it found that Facebook’s actions were “unfair and deceptive.”

Members of Congress are contemplating new privacy laws intended to better protect users as they pour more data online. Some lawmakers say enforcement at the FTC has ramped up, but new legislation is needed to ensure that future violations don’t occur.

This action against Facebook is just the first step toward protecting consumer privacy,” said Sen. John “Jay” Rockefeller (D-W.Va.) “Ultimately, I believe legislation is needed that empowers consumers to protect their personal information from companies surreptitiously collecting and using that personal information for profit.”


View Photo Gallery: In seven years, the social networking site has grown from a project hatched in a college dorm to the largest social networking site in the world, well on its way to hitting its goal of having 1 billion users.

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Cecilia Kang is a staff writer covering the business of media and entertainment.

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