It appears that the European Commission is preparing to crack down on Facebook. According to a report from the Telegraph earlier this week, the EC is planning to introduce a new directive that would actually ban targeted advertising on the site.
The newspaper raised privacy concerns and reported that the social giant "'eavesdrops' on its users to gather information about their political opinions, sexuality, religious beliefs - and even their whereabouts."
Facebook has a personalized advertising model that allows advertisers to target their audience based on various factors including location, demographics, likes, keywords, and other information it receives on users including registration data and information that users share on the platform. However, Facebook does not permit advertisers to know who its users are and also keeps its performance reports anonymous.
Should Facebook's advertising model be questioned? Let us know your thoughts.
This type of advertising model is not only what Facebook uses to make money, but it is also the model that many other Web companies utilize. Nonetheless, Facebook seems to be the primary focus of this effort.
In a response to WebProNews, a Facebook spokesperson told us:
"The Sunday Telegraph article is inaccurate, sensational and misrepresents both how Facebook's advertising model works and the current advertising privacy debate across Europe. By using Facebook, a free service, people agree to see ads that are valuable to them. Crucially people give their consent to be shown relevant ads by agreeing to our terms when they sign up - unlike other online advertising models. We also make clear that we do not share personal information with advertisers without their consent. We have spent considerable time and effort building an ads model which allows people to see relevant advertising whilst respecting their privacy: https://www.facebook.com/about/privacy/advertising."
"We are fully compliant with EU law, have our international headquarters in Dublin and unlike some other online services, we do not use tracking technology to serve adverts. Our system only provides advertisers with anonymised and aggregated information for the purpose of targeting ads. We do not share people's names with an advertiser without a person's explicit consent and we never sell personal information to third parties."
If the EC agrees to implement this legislation when it meets in January, Facebook could face legal action or a significant fine. To make matters worse, the European Union's data protection working party is meeting next week to analyze the social network and discuss how it should be audited.
Incidentally, this European news comes just as Facebook reached a settlement with the FTC over user privacy. Through the settlement, the social network is required to give users a clear and prominent notice before it changes the way data is shared.
In a blog post about the settlement, CEO Mark Zuckerberg acknowledged that mistakes had been made but promised better privacy and more user control going forward.
"I'm the first to admit that we've made a bunch of mistakes... But we can also always do better. I'm committed to making Facebook the leader in transparency and control around privacy."
In the post, he also announced two new corporate privacy officer roles. Erin Egan was appointed to the Chief Privacy Officer of Policy, and Michael Richter was appointed to the Chief Privacy Officer of Products.
Does Facebook's money-making model raise a privacy issue, or is the EC making invalid claims?