What does the Possible FTC Settlement with Facebook Mean?

The Wall Street Journal is reporting that the FTC is near settlement with Facebook over charges that its 2009 retroactive changes of users’ privacy settings constituted deceptive behavior.

This possible settlement reflects the current climate in government to protect consumer privacy. With Do Not Track waiting in the wings, California having just amended its privacy law, and Massachusetts stepping up in enforcing its stringent privacy requirements, it is incumbent on marketers to take privacy issues seriously. Marketers should be thinking about whether they really need the data they collect or whether they want it. Once they have it, they are responsible for safeguarding it.

At the same time, the model of social sharing as a way for marketers to build customer databases could be in jeopardy. Users pushed back against the 2009 Facebook changes. While Americans, in particular, are more liberal than Europeans when it comes to expectations of privacy, the FTC seems to be enforcing the concept of informed consent to give up privacy.

In addition, news of this possible settlement reinforces the concept that personally identifiable information (PII) still exists. We have seen a blurring line of late between PII and non-PII because of technologic innovations that allow marketers to break down walls of anonymity. If this settlement goes forward, it will underscore that people still harbor an expectation of privacy for their PII unless they, themselves, give it up. Hopefully, this settlement would then spur the market to become innovative and respond with technologic solutions for securing PII.

I will have more to say about this settlement in a future blog post if it, indeed, proceeds.