Friend or foe?

KARL QUINN
May 27, 2010

FACEBOOK suddenly knows what it's like to feel the cold hard sting of rejection. At the heart of the mounting backlash against the world's biggest social networking site is a philosophical conflict over privacy - what it is, whether it matters, and who has the right to control it.

Though there have always been concerns about Facebook's position on privacy, the current wave of anger began about a month ago when the company revealed plans to make users' private information available to advertisers through a new application, Connections. It was further fuelled by the leaking two weeks ago of founder Mark Zuckerberg's instant-messenger exchange from 2003, in which he referred to users of his nascent service as ''dumb f---s'' for entrusting him with their personal details.

Locally, the federal Communications Minister, Stephen Conroy, this week accused Facebook of showing ''a complete disregard for users' privacy''. That was followed yesterday by claims that Australian Federal Police investigations were being hampered by Facebook's refusal to co-operate. There have also been the high-profile cases of 18-year-old Sydneysider Nona Belomesoff, allegedly murdered by a man she had met on Facebook, and debt collectors at the ANZ bank who appeared to have created false profiles in order to befriend defaulters.

Little wonder, perhaps, that more than 15,000 people worldwide have vowed to terminate their accounts on May 31 as signatories to the first organised ''quit Facebook day'' (see quitfacebookday.com).

While that's very small beans compared with the site's more than 400 million users, the perception that Facebook cannot be trusted could seriously damage the company if concerns are left unchecked. You only need to look at the fate of MySpace - once the most popular social networking site on the web, but now with 120 million users a distant second to Facebook - to see how quickly an online success story can fray when its users cease to trust or believe in it.

Conroy played on the trust issue earlier this week when he attacked Facebook in Parliament. ''What would you prefer? A corporate giant who is answerable to no one, and motivated solely by profit, making the rules on the internet, or a democratically elected government with all the checks and balances in place?''

The senator also attacked the site over its origins: Zuckerberg created the proto-Facebook site Facemash in October 2003 when he hacked into the Harvard University database and posted student photos online in pairs, inviting friends to vote for the more attractive of the two.

''For Stephen Conroy to denigrate Facebook because of its origins is like hammering BMW for having made bombers for the Nazis, when in fact these days they make a pretty reasonable car,'' says Sydney-based digital marketing consultant Paul Dodson. ''Senator Conroy seems to want to restrict Facebook, but we shouldn't restrict it. We should let other people come in and do a better job. Eventually Facebook will die, and so will Twitter and others, as a better business model comes along.''

Facebook must have imagined it had developed that business model itself when it announced Connections last month. This new application allows users to link to other users in virtual communities of interest simply by clicking on the ever-present ''like'' button. But it also turns those communities into target markets for external parties. Crucially, it allows that linking to happen without users' knowledge, and even when users ''like'' something on a site outside Facebook.

''Basically, Facebook has transformed substantial personal information - including your home town, education, work history, interests, and activities - into Connections,'' wrote American lawyer and free-speech activist Kurt Opsahl. ''This allows far more people than ever to see this information, regardless of whether you want them to.''

Zuckerberg has spoken of Facebook's position on privacy being a matter of principle. In January, he told readwriteweb.com journalist Marshall Kirkpatrick that privacy had become largely irrelevant, particularly to Facebook's users.

''People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that has evolved over time,'' Zuckerberg said. The role of Facebook was ''to reflect what the current social norms are''.

To that end, the company developed its new default settings for privacy - basically, there is none. ''We decided that these would be the social norms now, and we just went for it.''

But in the view of Noah Borensztajn, director of the Melbourne-based online marketing company SplashBox, Facebook's position on privacy is motivated not by principle, but by profit. ''I think Facebook had an innocent upbringing as a university-based social networking service, but pretty quickly they caught on to the massive potential in database collection, and that is their main aim now,'' he says.

''Most of the value now is in targeted marketing, because it allows you to reach your optimum market with a decreased ad spend. So the more features they include on Facebook, the more applications they add on, and especially the 'like' button, all of that helps them identify what people are interested in, and not in an abstract way at all. They can actually prove to you that 2000 people in a given section have demonstrated their interest in something by clicking the 'like' button.

''Best of all, it's done under the handy guise of providing people with an incredible social networking tool, which it actually is.''

Professional Facebook watcher Nick O'Neill, who runs US-based blog allfacebook.com, estimates the company's incursion into the targeted advertising space thus far dominated by Google could lift the value of the company from about $US22 billion ($A27 billion) to more than $US100 billion.

Some people may well be fine with the idea of advertisers and others having access to that much information about them. But to those who aren't, Facebook simply says ''opt out'' - you can remain relatively invisible simply by not ''like''ing anything.

But John Lenarcic, lecturer in the school of business IT and logistics at RMIT, says this is not as easy as it sounds. ''It's the complexity of it. Deep down in the user agreement there's probably information about what you're signing up for and how to change the settings, but most people don't read it and would have trouble with it even if they did.

''It would probably be a more responsible approach for Facebook to set everything to private, and let people opt in if they so choose, but I think they're trying to give the impression that they're not a controlling organisation.''

In fact, so complex is it to disappear to all but your nominated friends on Facebook that a step-by-step guide to maximising your privacy settings published on businessinsider.com (look for ''How To Put Facebook On A Privacy Lockdown'') runs to 33 screens.

But is Zuckerberg entirely misguided in thinking privacy is not as important to us as it once was, or even as we tell ourselves it is? ''Social networking is a big billboard for you as a person, but the reality is we leave digital fingerprints 30 or 40 times a day, when we use an ATM or a toll road or enter the lobby of a hotel and are caught on CCTV,'' says Dodson.

But how we feel about ceding that privacy has a lot to do with how the information we cede is likely to be used. According to a 2007 survey conducted for the Office of the Privacy Commissioner, Australians are becoming more willing to see their information shared between government departments (80 per cent support, up from 71 per cent in 2004) and even to support a national identification number (62 per cent support). But they are increasingly opposed to the electoral roll being used for marketing purposes (82 per cent opposition, up from 77 per cent). In other words, we don't jealously guard every shred of privacy, but we do want to know it's being put to public use when we give it away.

As it happens, the Privacy Commissioner is investigating Facebook for possible breaches of the Privacy Act. Commissioner Karen Curtis informed The Age by email yesterday that her office does not support any business practice that forces an individual to share personal information publicly against their will.

''I note that individuals seeking to create a Facebook account are advised that certain limited information will be publicly available. All businesses need to be very clear with users about how and when their information may be used and proactively give information to users to help them make informed decisions about their privacy options.''

to be continued ..