Reports indicate that Facebook is close to a settlement with the United States Federal Trade Commission over privacy issues.

The Wall Street Journal is reporting, citing “people familiar with the talks,” that the settlement “would require Facebook to obtain users’ consent before making ‘material retroactive changes,’ to its privacy policies,” and “would require Facebook to submit to independent privacy audits for 20 years.”

The issue is at hand involves changes made by Facebook nearly two years ago, which make user info public by default (things like name, name, photo, location, and friends).

According to the report, the company would still not be required to have users to “expressly agree” to all future changes, but that the settlement “prohibits Facebook from making information that’s already on the site available to a wider audience than previously intended, without the user’s express consent.”

In other words, if a user shares info privately, Facebook wouldn’t be allowed to just turn around and make it publicly available. Well, that makes sense doesn’t it?

Assuming such a settlement takes place, users ought to be able to feel more comfortable with their privacy on Facebook, though given the company’s track record in this department, I’m not sure some people will ever feel completely comfortable. Wait until the Timeline comes out.

It will be interesting to see how such a settlement would impact Facebook developers and their apps. How many apps rely on the information that is currently publicly available on Facebook (profile pics, location, etc.)? Will this have an effect on how much of this people actually allow to be out there available? That could impact Facebook ad targeting too for that matter. At the very least, it could impede Facebook from making new making further advancements it may have otherwise intended, though this would certainly be a win for user privacy.

Still, Gawker is calling the whole thing “a slap on the [Facebook’s] wrist from the federal government”.

Clearly some feel that there should be a greater penalty for Facebook, for making public private info in the first place.

Facebook tells us it is not commenting at this time.