Facebook privacy practices get FTC shakeup

Facebook settled a federal complaint about its privacy practices, making major changes to the way it handles user information in order to clear away an issue that could have overshadowed its expected–and long awaited–IPO.

As part of the settlement, Facebook agreed to let users “opt into” changes that alter how their personal information is shared with advertisers and other users, to disclose the information it shares with third parties and to submit to two decades of annual “privacy audits” to ensure its compliance.

The settlement ends a Federal Trade Commission investigation into Facebook’s handling of personal information, which kicked off after several privacy groups filed a complaint with the commission in late 2009. The commission’s settlement order outlined eight counts in which it claimed Facebook had “deceived” its users by altering its privacy practices without warning.

“The FTC alleges numerous violations of the FTC Act, which prohibits deceptive or unfair acts or practices,” Jon Leibowitz, chairman of the FTC, said in a conference call. “The most important thing is to ensure consumer privacy going forward, and we believe this order does that.”

A seemingly contrite Facebook CEO Mark Zuckerberg admitted making mistakes. “Overall, I think we have a good history of providing transparency and control over who can see your information,” wrote in a blog post. “That said, I’m the first to admit that we’ve made a bunch of mistakes. In particular, I think that a small number of high profile mistakes, like Beacon four years ago and poor execution as we transitioned our privacy model two years ago, have often overshadowed much of the good work we’ve done.”

Full Story Via Cnet