Facebook privacy rules could cause ripples

Facebook CEO Mark Zuckerberg illustrates the network effect of Facebook during a keynote speech at the Facebook f8 Developer Conference at the San Francisco.

Stacey Vanek-Smith: Facebook is watching you, but maybe a little less closely. The Federal Trade Commission and Facebook are nearing a settlement over major changes Facebook made to its privacy policies in 2009 and 2010. But the settlement about more than just Facebook as Marketplace's Steve Henn reports.


Steve Henn: In the U.S., there are very few laws that dictate what companies can do with most of the consumer data they collect online.

Marc Rotenberg: That means that consumers have been left to rely on these privacy policies which are basically contracts.

Marc Rotenberg is the executive director of EPIC, an online privacy watchdog.

Rotenberg: If the companies don't honor these contracts -- if they say one thing and do another -- then it means there is no protection at all.

And that, Rotenberg says, is exactly what Facebook did by changing privacy rules for its users. Now he thinks Facebook should pay a price.

But Zach Hofer-Shall, a social media analyst at Forrester Research, says this doesn't mean Facebook's going to stop tracking us, because for Facebook to make money...

Zach Hofer-Shall: They need this data. So they'll need to keep asking consumers for data.

And Hoffer-Shall says the Facebook settlement could lead other social media startups to make their privacy policies as weak as they can.

In Silicon Valley, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.

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