Tags: ftc

How Facebook’s Privacy Policies Freely Sold User Data

How Facebook’s Privacy Policies Freely Sold User Data

Beyond • December 6, 2011

It’s difficult to feel sorry for mega-zillionaire Facebook founder Mark Zuckerberg, but you have to admit that his social network is in a bit of a bind. With an upcoming Initial Public Offering (IPO) which could value the company on the high side of $100 billion (yes, with a b) its less than stellar history of privacy protection may be placing the 2012 Wall Street debut between a stock and a hard place. On one side are the 800+ million Facebookers who would really rather not divulge every single aspect of what they share on profiles and posts they believe to be private. On the other side are the advertisers who consider every byte of “private” information to be an invaluable data mining motherlode. How deftly Facebook manages to keep these opposing parties appeased may determine the extent of success the stratospheric IPO can achieve. Mysteriously Targeted Ads The US Federal Trade Commission (FTC) recently released an investigative report that the agency conducted on the world’s largest social network. The FTC called out Facebook on a number of duplicitous policies violating user privacy after reassuring them that they would do nothing of the sort. The most critical failing was in sharing personal data marked as private with advertisers. Any Facebook user who would innocuously post various key words and phrases on profiles or posts would find that they were now presented with “mysteriously” but very accurately targeted ads. “I love to play hockey [Bauer], jetski [SeaDoo], and jog [Nike], then relax [La-Z-Boy] watching football [NFL] on my big screen TV [Samsung]…” Consumer Deception In announcing a settlement, the FTC stated that the social network \"deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public.\" The litany of privacy violations committed by the social giant are outlined within the pages of the FTC report and cover everything from making a vast amount of data that the users had directly specified as private visible to anyone on the net, and continuing to display photos and videos from deactivated accounts. The FTC excoriated Facebook executives for repeatedly stating that they did nothing of the kind but then were caught with their hand in the http cookie jar, so the settlement calls for biennial privacy audits conducted by the government with fines of $16,000 per violation per day. If the fines were levied on each conceptual violation then Facebook could theoretically just consider it a relatively minor cost of doing business. However, these fines will be applied on a user by user basis, so they could swiftly bankrupt the social network. Stalker Apps It seems that Facebook is either consciously or inadvertently missing the point of the FTC accusations. With the introduction of Seamless Sharing, the social network is turning back the clock to 2007’s Beacon service, which was shut down after a class action lawsuit was filed. The differences between Beacon and Seamless Sharing are… actually next to nothing. Facebook’s new/old application will stalk you across the internet posting everything you do and everywhere you go. If you don’t want your friends, family and coworkers finding out that you visited xxx rated sites, listened to polka, watched a chick flick or checked out instructions on how to poison your spouse and get away with it, then Seamless Sharing is not for you. Mercantile TIA Total Information Awareness (TIA) was a project launched by the US government’s DARPA in the dark days following the 9/11 attacks. The concept was to allow the military access to a digital dossier on every US resident: Everyone’s digital tracks would be shadowed down to the mouse click in order to provide the Department of Homeland Security information on potential terrorist activity. Seamless Sharing can be seen as the mercantile version of TIA but instead of keeping our country safe from terrorism, it keeps Facebook awash in billions of advertiser dollars by acting as our social stalker. Facebook’s IPO relies on how well Zuckerberg & Co. are able to dominate the business of personal data, and the implications are nothing less than staggering.


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Learning From Recent FTC Enforcements Under CAN-SPAM

Learning From Recent FTC Enforcements Under CAN-SPAM

Beyond • April 14, 2010

Every email marketer should be intimately aware with the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, also known by the unfortunate tinned ham moniker of CAN-SPAM. The management of bidz.com has learned just how serious the Feds are in enforcing these regulations. bidz.com Investigated For Failing To Honor Opt-Outs In May 2009, the management of online jewellery retail site bidz.com received a Civil Investigation Demand for Information from the Federal Trade Commission (FTC) as part of its investigation of the company\'s email marketing campaigns. The FTC was investigating whether bidz.com had failed to honor unsubscribe requests from individuals on bidz.com’s email list. Although the case was recently settled out of court, bidz.com did have to pay a cash settlement to the United States government for violation of CAN-SPAM statutes. Therein lies the lesson to email marketers. If you take any of the CAN-SPAM regulations lightly, they may come back to bite you in the bank account or worse. Each single email sent in violation of the regulations can subject your company to penalties of up to $16,000. Multiply that amount by the emails you sent last year, and you’ll see that the FTC is deadly serious about enforcement. CAN-SPAM Has Sentenced Email Marketers As Far Away As Morocco CAN-SPAM has shown its teeth in various FTC enforcement actions. The principals of Phoenix Avatar faced five years in jail for violating CAN-SPAM and an additional twenty years in prison for mail fraud. Many other convictions have been carried out, and the number of over-enthusiastic email marketers behind bars is growing. The long hand of the FTC even reaches offshore. Mr. Mounir Balarbi was tried in absentia and sentenced in a closed session, even though he resides in Tangier, Morocco. Granted, the offenses that have triggered prison time have been primarily connected to pornography or snake oil sales, so the Feds are not heading to your office with a SWAT team because your unsubscribe link goes to a 404 Error page. But a legitimate, legal business can still suffer heavy consequences. The management of bidz.com faced a prolonged investigation lasting almost a year, which certainly affected its online reputation as well as stock market value. The shares of bidz.com traded for $4.34 in early May 2009 but plummeted to $2.67 by the following month, wiping out about $30 million in market capitalization. The exact amount of the cash settlement bidz.com had to pay the government has not been revealed, but it was most certainly punitive. In short, the lesson you can learn from the bidz.com episode was that you don\'t want to be in their position. CAN-SPAM Is Essentially Good Online Business Policy For reputable, conventional email marketers who are not trying to peddle illicit images or garlic extracts guaranteed to cure cancer, the restrictions of the CAN-SPAM statutes are relatively mild and fairly common-sense. According to the FTC, the primary basic requirements are: Don\'t use false or misleading header information. Don\'t use deceptive subject lines. Identify the message as an ad. Tell recipients where you\'re located. Tell recipients how to opt out of receiving future email from you. Honor opt-out requests promptly. Monitor what others are doing on your behalf. If You Violate CAN-SPAM, You\'re A Criminal Although the \"bUy V-i-A-g-R-a nOw\" crowd violates all seven of those requirements with each email, responsible email marketers will realize that those are not restrictions as much as they are good online business advice. After all, if you have to resort to fudging your headers, lying in your subject line, hiding where you are, failing to allow recipients to opt out, and the rest of the rogue\'s gallery commandments, your primary interest is not in ethical business transactions anyway: You\'re a criminal and you deserve to be locked away from the rest of us.


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