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Information is currency. In today's digital age of lightning-quick information sharing, this saying has never been more apropos. The only problem is that multi-billion dollar Internet companies are the ones making all the currency, and it's earned from our information.

Social networking sites make their bread and butter from information sharing. First, users create online profiles for their own purposes – - to reconnect or stay in touch with friends and family, or to promote hobbies and businesses. Profiles generally ask for information one would not know just by meeting you on the street, like your date of birth, hometown, marital status and even what high school you attended.

Third-party companies access the information posted by subscribers to social networking services, design tailored marketing schemes, and then make profits from advertising campaigns targeting those same subscribers. For instance, by simply changing your relationship status, you may begin to see advertisements in the sidebar of your profile page that are directly associated with your status…wedding flowers for the newly engaged, or dating sites for the newly single.

Facebook has managed to achieve high user levels in a fraction of the time it took most of its predecessors and competitors. How exactly did an organization, based upon a popular new idea that had already been introduced to the Internet manage to distinguish itself and become a billion enterprise in less than 7 years? Subscribers to the service have more to do with it than they realize.

Facebook Origins and Phenomenon

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Facebook's CEO, Mark Zuckerberg is practically a legendary figure in the social networking world, and he is only 26 years old. His journey from a sophomore at Harvard University to head of the largest social networking site on the planet is filled with exactly the kind of pursuit of power and accompanying drama that you would expect. In fact, it is the subject of a Hollywood dark comedy movie set to debut this fall entitled The Social Network.

What started as a partnership with fellow students to create a Harvard-exclusive networking platform, eventually expanded to include other Ivy League schools with ties to Harvard. The exclusivity of the site and its ease of use inspired Zuckerberg to expand membership offerings to anyone with a college email address. The popularity of the site among the college crowd seemed to serve as an omen that the rest of the world should be able to enjoy the visually appealing, easy to use social networking site also. Soon, Facebook was wooing MySpace and Friendster subscribers; enhanced features on Facebook like Fan Pages, Event Pages, and the ability to request friends based upon school affiliation or even location made the site even more attractive.

Fast forward five years. Boasting 150 million unique subscribers in January 2009, Facebook's popularity rose quickly and its subscribership levels catapulted to 200 million in April 2009, and 250 million in July 2009. [1] In 2010, the social networking giant proudly announced that they have 500 million active, unique subscribers. [2]

For many users, the initial attraction to Facebook was its user-friendly format, and the organizations' concern for its users' privacy. Just two years ago, Facebook CEO Mark Zuckerberg bolstered Facebook users' original confidence in this stance when he commented on the importance of protecting Facebook subscribers' information in a conversation with ReadWriteWeb's Marshall Kirkpatrick, stating that privacy control is "the vector around which Facebook operates." [3] Since then, things have changed.

The Evolution of Facebook's Privacy Policy

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When Facebook incorporated in 2005, it "earned its core base of users by offering them simple and powerful controls over their personal information." [4] Small changes made year after year, resulted in a gradual but steady erosion of Facebook users' privacy, and the users' ability to control their private information. The two key items that seemed to change are 1) Facebook's definition of "public" versus "private" information, and 2) who was allowed access to your public or private information. A summary of some selected excerpts of Facebook's privacy policy highlight critical changes that have occurred since 2005. Those changes are the root of frustration and anger of many Facebook customers, and are detailed in an article written by Kurt Opsahl for the Electronic Frontier Foundation. The article can be read in its entirety by clicking here.

Want a quick snapshot of the contrast in policies?

In 2005:

"No personal information that you submit to Thefacebook {as it was originally called} will be available to any user of the Web Site who does not belong to at least one of the groups specified by you in your privacy settings."

In 2010:

"When you connect with an application or website it will have access to General Information about you. The term General Information includes your and your friends' names, profile pictures, gender, user IDs, connections, and any content shared using the Everyone privacy setting. … The default privacy setting for certain types of information you post on Facebook is set to 'everyone.' … Because it takes two to connect, your privacy settings only control who can see the connection on your profile page. If you are uncomfortable with the connection being publicly available, you should consider removing (or not making) the connection."

The length and complexity of Facebook's Privacy Policy has been widely reported on, including that it is now longer than the United States Constitution! A graphic representation of the intricacy of the policy was published by multiple media outlets illustrating just how convoluted the mechanism is. Blogger Matt McKeon published an interactive graph, distinguishing by year, how the default privacy settings have changed since 2005. See his graph here.

The move from a clear, concise description of your privacy rights has clearly evolved, and has raised major concerns in the technocrati community, amongst our law-makers, and even inspired a movement to answer Facebook's evolving privacy policy.

Facebook Responds to Recent Flap Over Privacy Issues

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In response to the criticism and groundswell of frustration expressed by Facebook users, Mark Zuckerberg wrote a one-page op-ed letter in The Washington Post. An excerpt from the letter states:

"The challenge is how a network like ours facilitates sharing and innovation, offers control and choice, and makes this experience easy for everyone. These are issues we think about all the time. Whenever we make a change, we try to apply the lessons we've learned along the way. The biggest message we have heard recently is that people want easier control over their information. Simply put, many of you thought our controls were too complex. Our intention was to give you lots of granular controls; but that may not have been what many of you wanted. We just missed the mark.

We have heard the feedback. There needs to be a simpler way to control your information. In the coming weeks, we will add privacy controls that are much simpler to use. We will also give you an easy way to turn off all third-party services. We are working hard to make these changes available as soon as possible. We hope you'll be pleased with the result of our work and, as always, we'll be eager to get your feedback." [14]

A summary of what Facebook will do in response to users' concerns about lack of privacy was outlined in the letter:

1. People have control over how their information is shared.

2. Facebook does not share personal information with people or services users don't want.

3. Facebook does not give advertisers access to people's personal information.

4. Facebook does not sell any of people's information to anyone.

5. Facebook will always be a free service for everyone.

In addition, Facebook is specifically addressing the number of clicks a person must make to establish more privacy on their profiles.

The 11 Modifications You Need to Know About

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As a technical application built around computer code and algorithms, the behind-the-scenes stuff that makes the privacy settings on social networking sites work is beyond what most of us can understand. Catharine Smith published an article on The Huffington Post that summarized the eleven changes Facebook made, with photographic representations that makes all the technical jargon easier to understand. You can read the full article with illustrations here.

The two biggest technical changes Facebook made: Implemented a new platform called "Open Graph" in late April, 2010, and placed the responsibility to keep private information confidential squarely on the shoulders of the users.

Open Graph

Essentially, Open Graph will allow developers to exchange more information, and "make every website on the Internet sharable across its network." [5] What does this mean? If you are one of the 500 + million users of Facebook, other websites that partner with Facebook, (even though you may not be one of their subscribers) could have access to your personal information that they do not have today. The Open Graph platform launched in April 2010 with more than 30 partners. [9] Facebook made a decision to default all of its users into participating in Open Graph. If you are a subscriber to Facebook, your profile was instantly personalized when Open Graph went live.

Responsibility of Maintaining Privacy

It is now our individual responsibility to ensure that the privacy settings on our Facebook accounts really hide the information we want hidden.

Even after changing our privacy settings, "what changes is how that data can be displayed to different people and how it can be integrated in different ways."

Public no longer means "public on Facebook," it means "public in the Facebook ecosystem." [6] Essentially, even if you make your Facebook profile private except to your friends, Facebook's partners will know key information about you…your school, church affiliations, book clubs, etc. That information is used as market research for product and service development and can be shared with different network service providers. So the next time you conduct a web search, a banner ad related to one of your interests or hobbies will show up.

What You Can Do to Protect Your Information on Facebook Right Now

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All Facebook: The Unofficial Facebook Resource by Nick O'Neill has been maintaining information on Facebook privacy settings, and what you can do to maximize your privacy on the site. [7] The top ten things that O'Neill recommends for subscribers to maximize their privacy follows. Detailed instructions to accomplish each step are available by clicking here.

  1. Group your Friends List
  2. Remove Yourself From Facebook Search Results
  3. Remove Yourself From Google
  4. Avoid the Infamous Photo/Video Tag Mistake
  5. Protect Your Albums
  6. Prevent Stories From Showing Up in Your Friends' News Feeds
  7. Protect Against Published Application Stories
  8. Make Your Contact Information Private
  9. Avoid Embarrassing Wall Posts
  10. Keep Your Friendships Private

How to Opt Out of Open Graph

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If you do not want to be part of this new super-information sharing, you must manually opt out. A step-by-step guide was widely published on various technical blogs on how to opt out. Here's how:

1. Once you log onto your Facebook profile, go to the top right hand corner and click on Account. The dropdown menu will provide options. Click the third option down, Privacy Settings.

2. Click the Edit your settings link in the Applications and Websites section (bottom left corner).

3. Click the Edit Settings button in the Instant Personalization section.

4. Remove the check from the box labeled Enable instant personalization on partner websites.

5. When prompted, click the Confirm button.

6. Back at the Applications, Games and Websites section of the Privacy Settings, click the Edit Settings button next to Info accessible through your friends.

7. Remove the checkmark from every single item listed and then click the Save Changes button.

8. You're almost done. Now you have to disable the 3 initial partners that Facebook is working with. Start out by heading to the Facebook Docs page. On the left side of that page, locate the Block Application link, and click it.

9. Click Block Docs when prompted.

10. Now you'll need to block two other Facebook apps as well—the Pandora app and the Yelp app.

11. That's it – you're done. There's only one minor problem. Docs, Pandora and Yelp are just the first 3 external sites that have this "shared integration" –more will certainly come in the future. And you'll want to block those as well. Facebook has an FAQ that will hopefully be updated as new sites are introduced. So you may want to bookmark that page and check it every once in a while. [8]

What Your Legislators Are Doing

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The United States Federal Government has taken a particularly strong interest in issues surrounding privacy in electronic information, and rightfully so. In an open letter to Facebook, Unites States Senators Al Franken, Charles Schumer, Michael Bennet and Mark Begich urged the company "to take 'swift and productive steps' to make user information more private and warning that the Federal Trade Commission may get involved if certain concerns aren't addressed soon." [10] Should the Federal Trade Commission find that it does not have the authority to make sufficient changes, the Senators offered that they would create legislation to protect subscribers on the site. Lawmakers furthered their investigation in July of 2010 when executives from Facebook, Google and Apple faced the Senate Commerce, Science and Transportation Committee to discuss whether or not privacy practices of online companies violate consumer privacy laws. [15]

The United States is not the only government with concerns over Facebook's practices. The United Kingdom wants more options to address cyber-bullying, [11] and is pushing the social networking giant to implement more controls to protect children online.

Facebook is not the only Internet mogul having issues across the pond. Google has come under scrutiny in Germany for its data collection practices. [12] Even before concerns arose in Germany, Google's merger with advertising giant Double Click raised concerns, and some lawmakers requested the business deal to be delayed. [13]

Privacy issues and the treatment of consumer information extracted from our online activities are not limited to the Facebook privacy changes that have occurred recently. The dialogue that has sprung up around the controversy has raised the public consciousness and provided a platform for valuable dialogue.

Helpful Online Resources

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Electronic Privacy Information Center

Connect Safely

Privacy Rights Clearinghouse

Electronic Frontier Foundation

Center for Digital Democracy