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FTC says it is creating Internet privacy framework amid growing concerns

The Federal Trade Commission said Tuesday that it plans to create guidelines on Internet privacy, amid a growing cry by privacy advocates and lawmakers to protect consumers from abuse of their personal data by social networks, search engines and location tracking on cellphones.

The comments came after four senators called for greater enforcement and rules at the FTC on Tuesday, with troubling business features on social networking site Facebook that they said exposed users’ information to the public and to third-party advertisers trying to create profiles on those users.

“We agree that social networks provide a valuable consumer service, but that they also raise privacy concerns,” said Cecelia Prewett, a spokeswoman for the FTC, who declined to comment specifically on the senators’ complaints about Facebook. “The FTC is examining how social networks collect and share data as part of a project to develop a comprehensive framework governing privacy going forward. Our plan is to develop a framework that social networks and others will use to guide their data collection, use and sharing practices.”

The complaints by the lawmakers, users and privacy groups have increased in recent months with the advent of new technologies like location-based services such as Foursquare, which allow sites to track users' location and spending activity through cellphones. A change in privacy setting policies at Facebook late last year and a mishap on Google’s Buzz social network that exposed e-mail contacts to the public have added to concerns that users are flocking to these Web sites without a strong federal guardian of privacy.

With advertising as the primary means of drawing revenue for their Web businesses, the desire to draw more detailed and tailored profiles of users will only continue to rub against the comfort levels of consumers and Washington’s desire to regulate those activities.

“This is a whole new world,” said Sen. Charles Schumer (D-N.Y.) in a news conference. “The onus here should be on Facebook, not on the user."

Last week, changes at Facebook made data from its users available to third parties unless a user opted out, the lawmakers said. Schumer and fellow Democratic Sens. Al Franken (Minn.), Michael Bennet (Colo.) and Mark Begich (Alaska) sent a letter to Facebook CEO Mark Zuckerberg asking him to reverse those policies. They also called for the FTC to take up new rules and step up enforcement of companies that harm consumer by misusing their private information.

With 400 million users, Facebook is the largest social networking site in the world, where people form miniature networks where they share pictures, personal musings, videos and information about their backgrounds with “friends” they connect with the site.

Last week, the company partnered with 75 companies, including The Washington Post and CNN, to allow their users to take their networks to other sites. The lawmakers said those business partnerships posed troubling questions on what information was being shared with the third-party sites. Washington Post Co. Chairman Donald Graham is a board member of Facebook.

Facebook agreed to let third-party companies retain information about its users indefinitely, a shift from previous policies that forced businesses to purge that information after 24 hours.

And the lawmakers questioned changes to its privacy settings late last year, which automatically made profile information publicly available unless a user opted out of that default setting.

“Folks who’ve put information out that they may not want shared with the entire world are put in the position where they have to opt-out. Now I would read what you have to do to opt-out, but we really only have so much time," Franken said at the news conference.
Facebook said it isn’t sharing information with third-party sites.

“Specifically, these new products and features are designed to enhance personalization and promote social activity across the Internet while continuing to give users unprecedented control over what information they share, when they want to share it, and with whom,” Elliot Schrage, Facebook’s vice president of communications and public policy, wrote in a letter responding to the lawmakers. “All of Facebook’s partner sites interact with a user’s consent.”

Some privacy advocates say that the agency hasn’t responded to complaints over Facebook’s privacy changes last December and a mishap by Google when it launched its social networking application Buzz. In February, Google launched Buzz through Gmail users’ accounts and for those that agreed to try it, their e-mail contact lists became public to other users of the application.

"It’s becoming increasingly clear that the FTC is a black hole for user concerns about online privacy, said Mark Rotenberg, executive director of the Electronic Privacy Information Center.

By Cecilia Kang  |  April 27, 2010; 5:15 PM ET
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