Two consumer groups urge Facebook to back off privacy changes

SAN FRANCISCO -- Two consumer watchdogs are urging Facebook founder and Chief Executive Mark Zuckerberg to back off proposed changes to its policies that they say would curb the rights of its 1 billion-plus users and make more personal information available to advertisers without users’ explicit consent in violation of a privacy settlement with the Federal Trade Commission.

In a letter sent to Zuckerberg on Monday, the groups asked Facebook to be “responsive to the rights of Facebook users to control their personal information and to participate in the governance of Facebook.”

European regulators also said Monday that they expect Facebook to give European users the right to accept or reject whether they want to share their personal information with Facebook affiliates such as photo-sharing service Instagram.

A Facebook spokesman could not be immediately reached for comment on the letter.

Facebook informed users last week that it planned to do away with its system that allows users to vote on –- and strike down -- changes to its policies and terms of services if the policy change receives more than 7,000 comments and more than 30% of users take part in the vote. In addition, Facebook said it would no longer let users control who could message them on the service, and would instead set up new filters to help users manage their messages.

Most controversial to privacy watchdogs: Facebook’s plans to begin sharing users’ data between its own services and affiliates, most notably Instagram, which it bought earlier this year for about $715 million. Google was on the receiving end of a similar reaction last January when it said it would combine users’ personal information from all of its services including search, email, the Google+ social network and video-sharing site YouTube. Regulators and privacy groups warned at the time that the policy change invaded users’ privacy and put them at greater risk for hackers and identity thieves.

“As our company grows, we acquire businesses that become a legal part of our organization. Those companies sometimes operate as affiliates. We wanted to clarify that we will share information with our affiliates and vice versa, both to help improve our services and theirs, and to take advantage of storage efficiencies,” Facebook spokesman Andrew Noyes said in an emailed statement.

But Marc Rotenberg, executive director of the Electronic Privacy Information Center, and Jeffrey Chester, executive director of the Center for Digital Democracy, allege that the proposed changes invade the privacy of Facebook users and “implicate” the terms of the privacy settlement Facebook reached with the FTC. In April, Facebook settled allegations that it deceived consumers and forced them to share more personal information than they intended. The company agreed to 20 years of independent audits of its privacy practices. Under the settlement, Facebook must get users’ consent for changes to its privacy settings.

“The settlement prohibits Facebook from misrepresenting the extent to which it maintains the privacy or security of covered information. Additionally, prior to any sharing of users’ personal information with a third party, Facebook must make a clear and prominent disclosure and obtain the affirmative express consent of its users,” Rotenberg and Chester wrote in Monday’s letter to Zuckerberg.

Rotenberg and Chester sent a copy of the letter to the FTC and said they plan to file a complaint with the FTC if Facebook is not “responsive.”

Irish regulators are also scrutinizing the proposed changes. Facebook is overseen by Irish data protection authorities in the European Union. Facebook Ireland provides service to users outside the U.S. and Canada.

“We have sought and received clarifications on a number of aspects and have outlined our position in relation to what consent will be required for aspects of the policy,” Gary T. Davis, Ireland’s deputy data protection commissioner, wrote in an email Monday. “We expect the proposed data use policy to be modified to take account of these issues.”

Noyes said Facebook is in “regular contact” with Irish regulators “to ensure that we maintain high standards of transparency in respect of our policies and practices. We expect to maintain a continuous dialogue with the Irish DPC as our service evolves.”

The changes could help Facebook -- after a rocky debut as a publicly traded company -- win back favor with investors. The giant social network is looking to reverse a sharp slowdown in revenue growth. The stock has declined more than 30% since its initial public stock offering in May.

Facebook, Google and other companies are under greater scrutiny for how they handle personal information. Consumers are handing over more and more personal information, yet privacy watchdogs say they have less and less say over what companies do with it.

Facebook downplayed the significance of eliminating its 4-year-old voting system, saying it has simply outgrown it. Instead of having users cast a ballot, Facebook said it would rely on other means of giving them a voice in changes to the service such as an “Ask the Chief Privacy Officer” question-and-answer forum on its website.

Privacy groups said scrapping the voting system “raises questions about Facebook’s willingness to take seriously the participation of Facebook users.”

Rotenberg had a hand in crafting the system that allows Facebook users to vote on changes. The original idea came out of a class he teaches at Georgetown University.

“We hope Mark Zuckerberg will do the right thing. The proposed change to the privacy policy is not fair to users. It’s their data, not Facebook’s,” Rotenberg said.

Facebook has notified users about the proposed policy changes and provided a seven-day window for public comments. Comments have already exceeded the 7,000 needed to trigger a vote.

The vote is expected to begin on Thursday. Previous votes have lasted seven days. It’s only binding if at least 30% of Facebook’s users take part, something that has not happened in two previous votes. That means more than 300 million users would have to vote.

Facebook investors were voting with their portfolios on Monday. Facebook shares hit their highest price in four months after analysts said investors had underestimated the company’s growth potential. Shares rose 8% to $25.94.

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