Facebook's Beacon just the tip of the privacy iceberg

Similar (or worse) tracking and information collection rampant across industry

Every little bit counts, and is counted

The growing monetization of hugely popular social networking sites such as Facebook and MySpace are only adding to this trend, notes Kathryn Montgomery, professor of communication at American University in Washington.

"Facebook and other popular social networks have ushered in a new era of behavioral profiling, data mining and 'nanotargeting' that will quickly become state of the art unless additional consumer and regulatory interventions are made," said Montgomery, who is the author of Generation Digital: Politics, Commerce, and Childhood in the Age of the Internet.

According to Montgomery, social networks are compiling elaborate profiles of their users by gathering "every bit" of data possible from the information people include in their profiles or post on the sites, and by tracking what their users do online.

The networking sites sell these profiles to marketers, who use the data to deliver messages that are hypertargeted to an individual's likes or dislikes. Messages can be tailored, for instance, based on things such as the kind of work people do, where they're from, their religion, their sexual preferences, their friends or the searches they perform, Montgomery said.

"The thing that concerns me is that these are mostly young people who are living in these online worlds," Montgomery said. "They enter into these interactive social networks because they want to connect with friends and to express themselves. I don't think they are even aware that they are being lured by these sophisticated and highly manipulative marketing," practices, she said.

People tend to strongly oppose such tracking when they know that it is happening or discover the extent to which it is happening, said Mark Cooper, director of research at the Consumer Federation of America.

For example, in a recent survey of 1,200 adults conducted earlier this year, 85% of the respondents said they rejected outright the idea that a site they value and trust should be allowed to serve up clickstream advertisements based on data from their visits to other sites. The survey was conducted by the Samuelson Law, Technology and Public Policy Clinic at UC Berkeley and the Annenberg Public Policy Center at the University of Pennsylvania.

A group created on Facebook to support a petition started by the MoveOn political advocacy group to protest Beacon's lack of privacy protection added 50,000 members between November 11 and November 29. Facebook users in the discussion forum for that group noted that their real complaint about Beacon is that Facebook is collecting the data about their purchases.

"I am sure the majority of the members of this group would have little problem with Beacon if it was something that they could individually choose to participate in," a user identified as Jonathan Horn wrote on the Facebook forum supporting the petition on Saturday. "What most people object to is their transaction information being harvested and shared without their consent."

But marketers tend to have the exact opposite view of the situation said Cooper, whose group is one of those asking for an FTC Do Not Track list. "The inclination of the industry is in direct conflict with the desires of the public, and we cannot rely on self-regulation," to correct the situation, he said. Federal agencies such as the FTC need to take the lead in getting the industry to adopt better standards of disclosure and to offer consumers easier ways to opt in and out of such tracking, he said.

"The people who believe that competition will solve the privacy problem have it backwards," he said. "We believe that in this market people will constantly try to find ways to exploit the personal information they have and that they gather. If a big mistake like [Facebook's Beacon] happens and it gets reversed, some will say we don't need a more systematic approach, whereas in fact it underscores the need for it."

Heather Havenstein contributed to this report.

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