Last week, Facebook announced changes that expanded the sharing of consumer data with a select set of third-party partners, and it only took a matter of days for lawmakers to press Facebook for changes and government agencies for more oversight. The fact that Washington took note of Facebook's changes isn't at all surprising; in fact, it was inevitable. But what happens next-- and what this means to marketers -- is not inevitable and depends a great deal on how proactive Facebook becomes on education, transparency and cooperation with lawmakers and privacy watchdogs.
The company that believes privacy is no longer a social norm is keeping too many secrets, and what people don't know CAN hurt Facebook (and by extension, Facebook partners and advertisers). Take, for example, the diversity of opinions about the recent changes announced at Facebook's f8 conference. Mashable says, "the data collection and overall privacy settings don't differ from what has already been available," while Sen. Charles Schumer of New York says: "They've created here, inadvertently, a gold mine of data for unsolicited ads, spam and even scammers." The wide range of opinion -- from unconcerned to so alarmed that action by Federal authorities is demanded -- demonstrates the extent to which people don't understand Facebook's Open Graph protocol.
The confusion caused by Facebook's lack of transparency with respect to sharing and privacy is also evident at the individual level. Have you registered for Facebook on CNN? I did, but I have to admit I'm unsure to what I've agreed. I logged into Facebook on CNN and was told doing so would "bring your friends and info" into CNN Social and "Publish content to your Wall" on Facebook. Does this mean Facebook will share any page I visit or only the ones I "Like"? Will it capture and store every page that I visit and share this data with advertisers? What data can CNN pull from Facebook about me and my friends? I don't have any idea what personal information is being shared, and perhaps more importantly, what could be shared in the future as a result of the permission I've granted to CNN and Facebook. Also, while I trust CNN, do I have the same trust for every potential partner Facebook may add in the future?
As Facebook and other social sites grow and extend their tendrils across an ever more social Web, questions about data and privacy will inevitably come from consumers, lawmakers and agencies, not just here in the U.S. but also in the European Union and elsewhere. This is not a sign of missteps on the part of Facebook and others, but a normal and expected phase in the maturation of social media. But while user, legal and regulatory concerns may be expected, this doesn't mean there aren't potential dangers for Facebook and for advertisers who partner with Facebook. These dangers range from laws that undermine key aspects of Facebook's sharing protocols to risks of legal action, not just against Facebook but partners as well. After all, Facebook wasn't the only company sued as a result of the ill-fated Beacon venture -- Blockbuster and other Beacon partners also found themselves in court.
The same sort of legal repercussions are not expected with the latest batch of Facebook changes, but the result of any new and future privacy laws or regulations could have an adverse impact on Facebook's future. The company appreciates this and has invited dialog with Schumer and others in Washington. The collaboration and transparency are sure to be welcomed inside the Beltway, but what can marketers do while Facebook works out these issues in Washington and around the globe? Should marketers race to implement Facebook's Social Plugins or wait to see how consumers and lawmakers react? Here are some dos and don'ts: