Facebook made of Teflon when it comes to privacy, analysts say

Facebook is being sued for allegedly intercepting users' private messages, following links and sharing the information with advertisers and marketers.

But analysts are doubtful that such accusations will be enough to make users abandon the social networking site.

Facebook scans users' private messages, follows any links in the messages to third-party Web sites and uses the information to build user profiles that are then shared with third parties, according to the suit brought by Facebook users Matthew Campbell and Michael Hurley on Dec. 30 in federal court in San Jose. The suit also seeks to be certified as a class action on behalf of all Facebook users in the U.S. who have sent or received private Facebook messages that included a URL in the content of the message.

"The right of privacy is a personal and fundamental right in California and the United States," the complaint states. "An individual's privacy is directly implicated by the collection, use, and dissemination of personal information. Defendant Facebook, Inc. has systematically violated consumers' privacy by reading its users' personal, private Facebook messages without their consent."

The complaint further states that contrary to Facebook's claims of offering users the ability to send and receive private messages, those messages are intercepted to cull information about the users' communications, not to facilitate communications but to make money off users' messages.

Independent security researchers looked into Facebook's practices, according to the plaintiffs. The lawsuit seeks an injunction against Facebook's practices and either $100 a day for each day of alleged violation or $10,000, for each user affected.

"The complaint is without merit and we will defend ourselves vigorously," said a Facebook spokeswoman in an email to Computerworld.

Jeff Kagan, an independent industry analyst, noted that if the allegations are upheld in court, it will be another instance of Facebook disregarding users' privacy.

"This is yet another slap in the face to customers," said Kagan. "Previous slaps have not cost them anything. Will this? I don't think so. However at some point, some day, they will cross over the line and when they do, they will start losing customers quickly."

Today, though, is not likely to be that day, he added.

Privacy is dead, Kagan said, and it's largely because users don't read the multi-page and often confusing terms of use agreements before signing up to any site or service.

"Users leave themselves open to this kind of abuse," he said. "That's the problem. The marketplace complains, but doesn't go away. So with no real price to pay, Facebook keeps misbehaving. Who's fault is it? Theirs for doing it and ours for letting them get away with it."

Rob Enderle, an analyst with the Enderle Group, said users should be aware that free services aren't really free. If people aren't paying out of their pocket, they'll pay another way.

"Ad-funded companies need to generate revenue, and they do so by mining the content they have access to," Enderle said. "In exchange, you get access to the product for free. Once you know this is going on, you can either decide not to use the service or to moderate what you share with them. This hurts because most folks don't really understand what they signed up for and feel violated as a result. Sometimes you do need to read the fine print."

Consumers need to remember that with services like Facebook, the real customers are the advertisers, not the users, he said.

Enderle, like Kagan, said users aren't going to leave Facebook for this kind of infraction. They haven't in the past and it's unclear what privacy infraction would force users, who connect with family and friends on the world's largest social network, to ditch it for another site.

This article, Facebook made of Teflon when it comes to privacy, analysts say, was originally published at Computerworld.com.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is sgaudin@computerworld.com.

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