Facebook has reached a settlement in the class-action lawsuit over it’s ill-fated advertising platform, Beacon. Launched in 2007, Beacon tracked user activity on third-party affiliate sites and posted the resulting data on the user’s Facebook profile page. This attempt to generate word-of-mouth buzz by broadcasting the consumer habits of users became an instant controversy, sparking concerns over privacy, transparency, and the inadequacy of user controls. A Computer Associates report amplified these concerns, alleging that the Beacon program collected data from third-party sites for users who aren’t even Facebook members. In the wake of the controversy, affiliate partners quickly abandoned the program, and some became ensnared in legal battles of their own. With yesterday’s proposed settlement, the Beacon program is now officially dead.
Although not officially admitting any wrongdoing, Facebook clearly learned a few things about the limits of permissibility when it comes to disclosing user information, particularly information garnered from third-party sites. Barry Schnitt, Facebook’s Director of Policy Communications, said in a statement regarding the Beacon settlement,
“We learned a great deal from the Beacon experience. For one, it was underscored how critical it is to provide extensive user control over how information is shared. We also learned how to effectively communicate changes that we make to the user experience. The introduction of Facebook Connect – a product that gives users significant control over how they extend their Facebook identity on the Web and share experiences back to friends on Facebook – is an example of this. We look forward to the creation of the foundation and its work to educate Internet users on how best to control their privacy; engage in safe social networking practices; and, generally, enjoy themselves more online by having knowledge that gives them a greater sense of control. We fully expect the foundation to team with other leading online safety and privacy experts and organizations that have been working diligently in these fields.”
These lessons should be taken to heart for any social media-minded business. While technology may provide the means to delve deeply into the habits of clients and consumers, the wisdom of such endeavors is dubious at best. Transparency is a double-edged sword, and when it comes to engaging social media users, privacy protection should be a paramount concern. The goal of social media engagement should be voluntary disclosure, and successful social media campaigns will incentivize user participation, relying on tangible rewards and intangible inducements to coax wary customers into sharing valuable consumer behavior information.