3 Reasons Why Facebook's Privacy Issue Matters

Here are three reasons why it is a relevant issue.

1. Users joined Facebook with the understanding they could control what information they wanted to share. The recent decision by Facebook reverses that practice. Facebook has decided to provide user data to select third-party Web sites and has begun sharing personal profile information. Users believed they entered into an implied contract with the social networking site and that their privacy statuses would remain as they set them. New York Sen. Charles Schumer noted in a press release that there is little guidance on what social networking sites can and cannot do and what disclosures are necessary to consumers.

2. In order to maintain privacy, users have to go through an opt-out process to restore their settings. No matter how simple the process, it doesn't seem fair to have to opt out of something you never opted for in the first place. In addition, interests listed by users on their personal profiles -- which used to be kept private -- are automatically aggregated and shared as massive Web pages. These new common interest pages are a gold mine of marketing data that could be used for spam, phishing scams, etc. A number of senators, including Schumer, have written a letter to Facebook CEO Mark Zuckerberg asking for the opt-out policy be changed to an opt-in setting.

"Online social networking sites are a great way to share information with friends, keep in touch with family, make business contacts and disseminate all types of information. They are a growing source for news and information," Colorado Sen. Michael Bennet said in a statement. "But people have a right to know what they are signing up for. They have a right to know how their personal information is being used. And they should be given a real opportunity to protect their privacy."

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3. Companies need to act with integrity to maintain customers' trust -- and still make a profit. Understandably, Facebook sees this policy as a way of financing the social networking site. Advertisers will pay big bucks to get in front of the right audience. Facebook made a mistake by not being up front with its users. But its users are expecting a lot for free. Perhaps the time has come for Facebook to consider some sort of subscription fee, which would guarantee users certain rights. The old adage, "you get what you pay for" rings true in this case.