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Facebook draws fire from privacy advocates over ad changes

(Courtesy of Facebook)
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Facebook came under fire Thursday from privacy advocates who say that changes to its ad network mark an unprecedented expansion of its ability to collect users' personal data. The advocates are also criticizing the Federal Trade Commission for allowing Facebook to make the changes and argue that the network's size gives it too much knowledge about its users.

The social network announced the changes in an official company blog post Thursday, saying it will now draw information from other Web sites to inform its ad choices, mirroring the set-up that many other online advertisers use. The changes will take effect first for U.S. users, who should see them roll out in the coming weeks. The company currently bases its decisions about what ads users see mostly on the posts and pages that users follow or "like" within the site. Other advertisers are able to use off-site information to decide which ads to show Facebook users through Facebook's ad exchange, but the social network itself has not previously used that information to choose ads for users' central feeds.

Facebook, of course, is no stranger to privacy criticism. In 2011, the company settled charges with the FTC over changes to its privacy policy. As part of that settlement, the company is required to get users' explicit permission to make significant changes to its privacy policies and must submit to periodic privacy audits for 20 years. In its announcement Thursday, the company said that it will follow competitors in joining the Digital Advertising Alliance and adopting that organization's central tools to let users opt out of data collection for ads. Facebook also introduced a new tool on its site that allows users to get more information about why they're seeing certain ads.

Facebook public policy manager Rob Sherman said that Facebook's changes mirror the actions of its competitors and added that the company believes the new tool is an industry first.

Facebook may simply be offering its own version of what other companies already do, said Jeff Chester, executive director of the Center for Digital Democracy. But  it is a significant change in the advertising landscape because of Facebook's size, he said. The network has over one billion users worldwide, and hundreds of millions of users in the United States.

"It's true that everybody is doing all of this, and that's how the system works," Chester said. "But this is unprecedented. Given Facebook's scale, this is a dramatic expansion of its spying on users."

Chester said that he and other privacy advocates will raise their concerns Thursday in a previously scheduled meeting with FTC Commissioner Edith Ramirez and will also be contacting regulators in Europe about the changes. He believes that the new changes should be considered a violation of Facebook's earlier agreement with the regulatory agency.

"We are very unhappy that the FTC appears to have given Facebook the greenlight on this," he said. "This kind of expansion and a thumbs-up from the FTC makes a mockery of its privacy regulation."

"We can't speak for the commission, but we are confident that these updates comply with our legal obligations, including our commitments to the FTC,"  Facebook said in a statement Thursday.

FTC spokesman Jay Mayfield said: "Commission investigations and deliberations are non-public; therefore we cannot comment on any particular case. However, the FTC rigorously enforces its orders.”

The dustup over Facebook speaks to larger frustrations that privacy advocates have with online advertising and U.S. efforts to regulate that industry. Right now the online ad industry adheres to its own guidelines on data collection. The DAA, which comprises several of the country's largest online ad firms, runs a program that allows users to click on a blue, triangular icon on ads. That, in turn, directs them to a site where they can request that their browsing or other data not be used to build advertising profiles.

But many average Web users don't understand that process, said Joseph Turow, a privacy expert and professor of communications at the University of Southern California's Annenberg School.

"Most people have no clue, even, that those icons are common at all," Turow said, citing his own research on the subject.

Turow also said that he's found in studies that many users also don't understand that, in general, the privacy restrictions they set on social networks such as Facebook have little bearing on how their information is shared with advertisers.  He said that Facebook, in particular, has become skilled at reading what people understand about online privacy and figuring out how to gradually expand its data collection efforts in ways that will tamp down criticism.

Many people have come to understand their social networking privacy setting, for example, Turow said. But privacy settings largely affect front-facing information --  how users see each other on the sites -- rather than what advertisers can draw from your information. Advertisers, he noted, use the information they collect to create ideas about how people who fit your profile act. Even though much of that information isn't linked to people's names, he noted, the idea may make some people uncomfortable.

"Maybe you don't even want to participate in those activities," Turow said. "And yet you have no choice."

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