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Why Facebook is Losing Face (Trust)

Do you have a nagging sense that Facebook isn’t always straight with you about how they share your personal information, photos, posts, friend lists, networks, likes and surfing habits? That they are selling your data in ways that you have never even imagined?

Your instincts are dead on. Facebook has been saying one thing to our faces and doing another behind our backs. Facebook is in pre-IPO mode and has the propaganda machine running overtime like Big Brother at an Animal Farm.

Enter the Federal Trade Commission (FTC). The FTC just released a formal complaint identifying eight counts against Facebook for violating the Federal Trade Commission Act. The FTC confirmed what we’ve always known: Facebook tells us what they think we want to hear, not necessarily the truth. Here are the details of Facebook’s dishonesty:

• Under the guise of increasing user privacy, Facebook has consistently provided their advertisers with ever-expanding access to sensitive user information, not less.
• Contrary to Facebook’s marketing machine, user profiles are assigned a unique User ID that allows applications (e.g. Farmville) to track us as individuals, not as anonymous, aggregated members of a group.
• Even if you restrict all applications’ access to your data, your friends can install applications that allow Facebook to expose your personal information without your consent or knowledge.
• When a user deletes their account, Facebook will remove the user’s profile, but they do not remove the private data associated with the profile upon deletion. It remains stored on Facebook-managed servers, forever available to vendors, advertisers and applications.
• Worst of all, the FTC confirms that anytime Facebook makes updates to the website, a user’s personal security settings are lost and must be re-set because prior settings have been “overridden” by the updates. In other words, all of the time and work you put into customizing your privacy and security settings are lost anytime Facebook adds or tweaks a feature.
• Within every count in the complaint about Facebook’s business practices, the FTC used one or more of the following “qualifiers”: False or misleading representation, Deceptive act or practice, Unfair act or practice, Contrary to the statements made…

But Facebook hasn’t just violated a law imposed by the FTC, they have violated the trust of their profit-makers, all of us, the users. At the most basic level, Facebook has failed 6-7 clear litmus tests of trust leadership. Here are three of their biggest violations:

1. Transparency – the right of those on the outside (users) to know what those on the inside (Facebook, application developers, law enforcement) know about us. Users know nothing, and in fact, it often seems that Facebook employees don’t know how the ‘engine on the inside’ works.
2. Expectation – the reasonable assumption that Facebook honestly tells us how our data is being collected, aggregated, used and sold. As shown by the FTC complaint, they are doing no such thing.
3. Respect – the most basic component of customer service, which says that users should be treated as stakeholders in the company, not as naive profit-centers who donate their data, for free, as endless inventory to be packaged and sold to multiple bidders.

The FTC reveals an arrogant Facebook, an organization that has systematically exempted itself from the rules, because of it’s size, it’s wunderkind story and our obsession with comparing our lives to others’. With an IPO expected early next year, it’s feared Facebook will tell the FTC what they think it wants to hear, once again, protecting their bottom-line at any cost.

Ultimately, if Facebook continues to ignore the elephant in the room, all stakeholders (including stock holders) will divest their investment and delete their profiles and we will start to speak of Facebook like we do MySpace. Of course, Facebook is too successful right now to fathom that outcome.

John Sileo is a leadership speaker on deception and trust, including: social media privacy, trust leadership and identity theft. His clients include the Department of Defense, Experian, Homeland Security Pfizer and the FDIC. Contact him on 800.258.8076. 

Posted by Identity Theft Speaker John Sileo in Digital Reputation & Trust, Fraud Detection & Prevention, Online Privacy and tagged "Facebook FTC", "FTC Complaint", Complaint, Facebook, FTC, Privacy, Sileo.

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