Tuesday, June 5, 2012

What happens when a public company has your private data?

What happens when a public company has your private data?  It used to be that Facebook was owned and operated by a private citizen.  Sure it was fun to question his motives.  Those were the days.  Maybe it wouldn’t have changed if Facebook shares had started to skyrocket from the getgo, but they didn’t.  And now they have shareholders to think about.  So what happens to Privacy when Facebook shares drop like an anchor?  

The shareholders start to yank the leash.

This week, Facebook announced they will start allowing individuals under the age of 13 to join its site.  A bit of background here, most Internet companies have policies against catering to kids younger than 13, not because they care about the kids, but because they have to comply with a set of guidelines called the Children's Online Privacy Protection Act  or COPPA.  COPPA requires service providers to verify that they have their parent’s consent, usually by taking a credit card number or having their parents call a telephone number.
To sweeten the IPO, look at the changes they made in the final weeks before their IPO.  They announced a major change to their privacy policy.  They will now “retain data for as long as necessary to provide services to users and others”.  This is after FB was fined $138,000 in 2011 inIreland for keeping a deleted user’s data.

Now back to children under 13.  Zuckerberg was quoted in 2011 with saying that kids should be allowed on Facebook.  Not for selfish reasons, of course, but because he thinks that it could help with their education.  Because they can learn a lot from other students.  And why not allow kids on Facebook?  Lots of parents create accounts for their kids while they are still in the womb…like the Superbowl commercial for Google where the parents create an account and start emailing their child pictures and stories.

Lawmakers are highly concerned that Facebook is opening up to children under 13 to create a whole new market of potential advertises for themselves.  You can already sell targeted ads by age group, so why not start targeting kids with more sugar cereals and toys and movies.  Because maybe kids don’t watch so many commercials anymore.  Thanks TiVo!

Of course, Facebook also announced that they will allow their users to vote on the new change.  To be binding on the company, whatever the vote turns out, 30% of the users or 270 million people need to click.  US National voter turnout in 2010 was only about 37% and only 90 million people voted.  Only Facebook knows how many of their 900+ million users are very active on the site, my guess is that it is probably less than 50%, but it would be astounding that enough people would vote, for or against, the privacy policy changes.  So one might ask...is the vote just going through the motions?

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