• by Wendy Davis , Staff Writer @wendyndavis, March 8, 2010

Evidence is mounting that the Federal Trade Commission is gearing up to take action against Web companies -- especially social networking services -- that play fast-and-loose with users' privacy.

In the latest sign, the FTC's consumer protection chief, David Vladeck, expressed interest in the Electronic Privacy Information Center's complaint about Google Buzz. "Your most recent complaint raises interesting issues that relate to consumer expectations about the collection and use of their data," Vladeck wrote in a letter made available on EPIC's site today. "As the products and applications offered by companies grow in their complexity, it is critical that consumers understand how their data will be used and have the opportunity to exercise meaningful control over such uses."

The wording is similar to a letter Vladeck sent to EPIC in January in response to its complaint about Facebook's recent privacy changes.

Vladeck doesn't confirm or deny that the FTC is investigating, but there's little doubt that the commission is concerned about online privacy. And, even though many Web companies are coming in for scrutiny, few of them have changed the rules mid-stream, the way Facebook and Google appear to have done.

At launch, Google's Buzz blindsided Gmail users by revealing information about their email contacts to the Web at large -- information that users clearly expected would remain confidential. And late last year, Facebook changed its default recommendations to share-everything-with-everyone while also reclassifying some data, including lists of friends and pages people were fans of, as "publicly available information."

Google quickly revised Buzz, but Facebook has yet to rescind its changes.

While Google's launch of Buzz and Facebook's privacy revisions have sparked consumer class-action lawsuits, it's not clear they'll get very far. One big hurdle for the plaintiffs is that they don't appear to have suffered tangible economic losses as a result of the companies' decisions.

But even if privacy flip-flops don't cost consumers money, Web companies nonetheless create significant problems for people by not respecting people's expectations about privacy. What's more, the FTC can take action against companies that allegedly violate users' privacy regardless of whether consumers have lost money as a result. In fact, the FTC has already done so. Last year, the commission extracted a settlement from Sears for allegedly installing tracking software on visitors' computers without providing adequate notice. In that case, Sears paid consumers $10 each to keep the software for one month; additionally, there were no allegations that any consumers' data was misused by hackers or others.