Facebook’s executives are no doubt licking their wounds about the tough sanctions imposed on the company by the U.S. Federal Trade Commission. The social media juggernaut must now redesign its systems and policies to protect privacy. It’s likely that the bankers preparing Facebook’s imminent IPO are feeling the pain too.
But the FTC may have unwittingly saved the company with the settlement reached Nov. 29. Privacy has been Facebook’s Achilles heel and over the years, the company has continually gotten it wrong. Now the FTC is forcing it to get it right. Facebook could have avoided this mess if it understood that privacy needs to be designed into its DNA. The lessons apply to all companies, not just social media websites.
The FTC said Facebook “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 company didn’t warn users that this would be happening. It also claimed that detailed user information would not be shared with advertisers, when it was doing exactly that. And when users left the service, Facebook said their information and photos would be removed, when this information actually remained available.
As a pioneering social media company, Facebook is continually venturing into uncharted waters. Before it arrived, few would have predicted that hundreds of millions of people would voluntarily log on to the Internet and record detailed almost minute-by-minute data about themselves, their activities, their likes and dislikes. The degree of detail Facebook knows about its users is unprecedented.
Why has Facebook continually botched the privacy issue? Most believe this treasure chest of information has motivated Facebook executives to collect and monetize every scrap of data they can, even if that means undermining its members’ privacy. But there may be a deeper cultural reason. In his book
They believe that “more visibility makes us better people,” Mr. Kirkpatrick says.
Some at Facebook refer to this as “radical transparency” – a term initially used to talk about institutions, now adapted to individuals.
If true, this is naive, misguided and dangerous. Transparency applies to organizations, not people. Organizations are increasingly obliged to communicate pertinent information to their customers, shareholders, business partners and so on. This is not the case for individuals. Indeed, individual privacy is the foundation of a free society and individuals have an obligation to themselves to safeguard their personal information. And institutions should be transparent about what they do with that information.
Over the years, users have shown a distinct lack of loyalty to their networking platforms. The privacy issue has recently become an important consideration for sophisticated users and many of these have become frustrated with Facebook, dumping it for more privacy-friendly platforms. Given the company’s privacy-hostile DNA, it was only a matter of time before users started abandoning the company in droves. So the FTC’s sanctions may have unwittingly helped the company survive.
