Facebook is poised to capitulate to privacy concerns and alter its controversial advertising system…
“Facebook has drawn the ire of thousands of its users, and has once again bowed to the pressure of the political campaign against its advertising techniques…”
San Francisco -- Confronted with mounting privacy protests, Facebook.com has scaled back a Web monitoring feature that notifies one’s friends when the Facebook user visits affiliated Web sites, the company said on Thursday.
“Amid pressure from users and protests from activist groups like MoveOn.org, Facebook has altered its controversial “Beacon” advertising program, giving users more control over how their Internet activities are incorporated into their Facebook profiles.”
The protest was started by online activist group MoveOn.org, who set up a petition on its Web site at http://civ.moveon.org/facebookprivacy/?rc=fb_front/ calling on Facebook to give users a simple way to opt out of Beacon.
Last week the social networking website, which is under pressure to convert its vast user numbers into cash, angered its members when it emerged that Beacon, a newly unveiled advertising tool, publicized details of their shopping habits without their permission.
The Beacon ads, which project Facebook users’ activity on third-party partner sites--retailers like Blockbuster and eBay, for example--to their friends’ “news feeds,” are a key part of Facebook’s much-hyped new social-advertising program, but they had not received the friendliest of reception.
Facebook members who shop on Beacon sites like eBay and Fandango must now give Facebook explicit permission before Facebook includes purchase information in a user’s newsfeed or mini-feed. Users were previously given only a brief, opt-out window before their information was sent to and published on Facebook.
In a statement, the Palo Alto, California-based company said it was making a several changes to a recently introduced feature called “Facebook Beacon” in the wake of a petition signed by 50,000 Facebook users to scale back the feature.
The changes announced by Facebook, promises to give users some improved controls over what information about a user’s Web activity is broadcast to friends and also improves notifications to users before releasing user data to other Facebook users.
Executives of the 4-year-old company that has exploded in popularity since May, when it opened up to let independent software develops build their own applications on the site, were in deep talks over proposed changes late into the afternoon on Nov. 28, according to a person familiar with the matter.
“It has grown by nearly fivefold to 55 million users in a year.”
A Facebook spokesman said: “Facebook is listening to feedback from its users and committed to evolving Beacon so users have even more control over the actions shared from participating sites with their friends on Facebook.”
Beacon is part of Facebook Ads, an advertising program introduced earlier this month that allows advertisers to create their own Facebook profiles to facilitate interaction with members. Beacon works with outside e-commerce sites and was intended to put updates in a user’s Facebook feed when they made purchases from participating Web sites.
Beacon currently has 44 participants, including Fandango, eBay, LiveJournal, and Blockbuster, according to Facebook.
The most serious consequence of Beacon, a new advertising system designed to tap into “the recommendation generation,” so far has been to reveal details of Christmas gifts meant to be surprises. But Facebook members are angry that the tool has notified their online “friends” of purchases made on retail sites outside of the social network.
“Matt in New York already knows what his girlfriend got him for Christmas,” said one post on Facebook.com.
“Why? Because a new Facebook feature automatically shares books, movies, or gifts you buy online with everyone you know on Facebook. Without your consent, it pops up in your News Feed - a huge invasion of privacy.”
It is a situation reminiscent of the one last year when the initial launch of Facebook’s News Feed provoked extensive user protests, resulting in a profuse apology, and the installation of stronger privacy controls.
This time around, MoveOn and a group of dissatisfied Facebook users had taken on the allegedly invasive Beacon ads, claiming that they were not only a violation of user privacy that was difficult to work-around, but also was responsible for spoiling a handful of holiday surprises when online shopping lists were published on news feeds.
MoveOn last week launched a campaign against Beacon, charging that the program was invasive and had poorly labeled and exhaustive opt-out functions.
“The MoveOn.org petition begun on November 20 called for an opt-in policy and started an anti-Beacon petition on Facebook, which attracted 5,000 backers that day, 25,000 by Monday and 50,000 on Thursday.”
“The protest was far from a rejection of Facebook.”
The site read: “A lot of us love Facebook -- it is helping to revolutionize the way we connect with each other. But they (the company) need to take privacy seriously,” the petition pleaded.
It was the second major privacy protest by Facebook members that has led the site to back off new features. In September 2006, a university student-led protest attracted more than 700,000 signatories to a petition to improve privacy features inside the Facebook site itself.
“The row threatens to distract Facebook as it strives to reap profits from its vast user base.”
Facebook initially said that MoveOn was misrepresenting how Beacon worked because information was shared only a person’s network of friends, not the entire Web or all Facebook users. By Thursday night, however, the social networking site released a statement that said it would only publish Internet purchase permission if a user gave Facebook permission to do so.
“Users must click on ‘OK’ in a new initial notification on their Facebook home page before the first Beacon story is published to their friends from each participating site,” Facebook said. “We recognize that users need to clearly understand Beacon before they first have a story published, and we will continue to refine this approach to give users choice.”
Even as Facebook mollifies disgruntled users, it risks rankling some of the partners that signed on in hopes of benefiting as members broadcast their purchases -- say, from Blockbuster or eBay -- to a circle of friends.
As part of the Beacon arrangement, partners pay for what Facebook CEO and founder Mark Zuckerberg has called “trusted referrals.” The idea is that Facebook users will be more apt to patronize the sites and stores their friends are using. On Nov. 6, when he announced the system, Zuckerberg called trusted referrals the “holy grail” of advertising.
But many Facebook users insist that they, not marketers, should set the terms of how, and how much of, their information is shared for advertising purposes. Some threatened to move to other social networks or start their own blogs if Facebook takes that decision out of their hands. “I will set up my own blog,” says Flaschen. “It is a little less convenient, but if [Facebook] cannot understand the privacy implications of what they are doing then it is not worth it.”
MoveOn characterized the change as a “victory.”
Jeff Chester, executive director for the Center for Digital Democracy (CDD), wasn't convinced.
“Facebook still does not really want to face-up to its many privacy problems,” Chester said in a statement. “The Beacon fix still permits Facebook to collect, store, analyze, and potentially use a member’s purchasing data.”
The Federal Trade Commission and other regulatory agencies need to monitor Facebook’s privacy protections, Chester said. The CDD “intends to pursue this case.”
Analysts agree. The Future Foundation, a think tank, recently published a report that said social networks will be a force in online retail. It found that the “ultimate endorsement for a product now comes from the ‘lips and clicks’ of friends and contacts on sites such as Facebook and MySpace, as purchase is more likely to come from recommendation than any other form of marketing.”
Adam Green, a spokesman for MoveOn, hopes other social networks that have their own Facebook-like feeds about users’ actions -- namely, News Corp.’s MySpace -- take heed of such warnings. “We hope that this is opening a lot of people’s eyes to the very real privacy concerns on the Internet,” says Green. “The privacy interests of Internet users should get put before the wish list of corporate advertisers.”
There have been several other protests, including a petition group in the Facebook site itself called “Facebook, stop invading my privacy.”