Facebook privacy questions should be judged by consumers not politicians

As you may well have seen there is quite a furore at the moment about Facebook’s new privacy settings – see the articles today in the NYT, FT and GigaOM, and it does seem to me like Facebook could be doing a better job here, at least by making privacy settings simpler and communicating what they are doing better.

But that does not mean they should be forced to change their service by the regulator, as has happened already in Canada, and now seems a possibility in Europe.

Nobody is compelled to use Facebook and everybody has the option of not sharing any data, by closing their account.  To me this makes Facebook’s privacy settings an issue to be decided in the market by consumers not by politicians.  Google Street View is also getting a lot of criticism, but this case is different because everybody on Facebook chooses to be there.

Long time privacy advocate Alan Patrick wrote a blog post yesterday which talks about a competing service to Facebook which has been getting a lot of early support – if people care about privacy they will migrate to alternative social networks like the one Alan describes.

Meanwhile, within reason Facebook should have the right to build the service it chooses and do what it needs to do to make money.  Right now it seems that politicians are stepping into areas that should be left to Facebook.  For example in Germany they are talking about compelling Facebook to allow users to create accounts under pseudonyms, which runs contrary to Facebook’s philosophy since the start (see FT article), and in Europe generally they are seeking to regulate default privacy settings in a detailed manner (see PaidContent article).

This matter is naturally of huge concern to Facebook who are holding an all hands meeting on this subject today because they rightly fear that regulators might undermine their business.  It would be to the detriment of just about all of us if that were to happen.

A caveat to finish: protecting minors is a different matter to everything I’ve talked about here, and should be of prime concern to all of us, including governments and regulators.

  • truthflux

    It seems to me that social networks (or at least the graph components of them) are natural monopolies. There are exponential benefits to the user through number of customers signed-up, even without considering cost and sales channel economies.

    Additionally, there is a strong disincentive to switch between networks because, though the nature of the way users are recruited, the chances are the majority of friends use the same network, so there would be very little marginal benefit to an individual in switching, even if they very much preferred the new privacy settings.

    Furthermore, there are the same problems as with general consumer terms, in that if these settings are hidden in the site few people see the benefit in wading through the boilerplate, or do not contemplate the situation in which they act against them. For most people who do not follow web trends closely this change will come as a nasty surprise in the same way that it would come as a surprise if you read the small print on the back of a grocery bill and found that a copy had been mailed to all your friends.

    As much as it sticks in one's throat, my conclusion is that significant regulation will be, if not already is, required on social networks.

  • Thanks for the insightful comment. I think that the network effects in social networks are not that strong – remember Facebook is only the latest in a long line, and regarding the consumers knowledge of the T's and C's surely the answer is publicity rather than regulation. Note that there already has been quite a lot of publicity but it only seems to be the digerati and regulators that care.

  • You say 'everybody has the option of not sharing any data, by closing their account' – but not everyone is that savvy and aware of the changes in the privacy settings of Facebook. Lack of knowledge should not be construed as acceptance.

  • To add on:

    A corollary that comes to mind – a few years after credit cards were launched in India, consumers suddenly found they were being charged for an insurance fee that they had no clue about. Upon delving further, it was highlighted that banks had activated a default annual insurance fee (details in small print). But of course you needed to be aware of the existence of said fee to deactivate it if you felt you didn’t need it – and no one at the bank had bothered with the awareness generation. There was a huge furore as you can imagine.
    And the final ruling was that the default has to be deactivation. Firms can educate consumers about the advantages of the fee but let them decide if they want to activate it or not.
    I know this is a monetary example but I feel the same principle holds for privacy settings.

  • I accept that people don't necessarily understand what is happening to their data, but I think if they did know they might take the trade off on offer, so the first response should be education not regulation.

    Additionally, the Indian credit card situation was a little different – Facebook aren't taking money off anybody for anything.

  • Sure. But it is the Company in question which should be bearing the responsibility of education. And when they don't – that's when the regulator/law needs to step in.

  • An alternative point of view is that the press has made a lot of publicity, but nobody has cared, suggesting that the regulator should leave well alone

  • I have heard a lot now on FB privacy and daily posts almost by all bloggers, i admit that FB share information, and many are not concerned but few are most concerned.

  • Exactly