Monday, September 28, 2009

Beacon of Hope

So maybe Sean Lane got what he deserved having purchased his wife’s engagement ring on, but what was intended as a pure act of love became the hallmark example in what ultimately unraveled what Facebook saw as a viable advertising system.

Lane, who’s internet privacy is now shot because of this incident, purchased a diamond ring for Shannon, his bride-to-be, on the high-volume discount website (classy). But without his knowledge or permission his purchase was published on his Facebook news feed through Beacon, one of FB’s advertising products.

The resulting class action court filing, Lane et al vs. Facebook, Inc, describes how it works (via CNET):

"[Whether or not] the user was not a member (of Facebook), Facebook still obtained the notification from the Facebook Beacon Activated Affiliate. Information regarding user activities was sent in real time to a third party Web site--one which was not open or active in the user's browser, and one which, in many cases, the user may never even have visited or heard of."

Got that? So basically, Facebook’s Beacon gathered personal data without users’ permission, or even their membership in Facebook, to sell to their advertising clients. And Overstock isn’t the only one, just the main whipping boy. A similar class action suit against Blockbuster Video is being heard in Texas, and a full list of Beacon clients can be found here.

In 2008 Facebook CEO had this to say about Beacon (via LA Times), "[Beacon] might take some work for us to get this exactly right, [but] is something we think is going to be a really good thing." Nevertheless, Lane et al vs. Facebook was settled last week, and not only will Beacon go dark, but Facebook will donate nearly $10 million to establish a foundation to address online privacy and safety concerns.

So chalk one up for the little guy and the privacy advocates. But what does this mean for the marketers? Will cases like this push them toward greater transparency, or further under the radar of everyday consumers? Only time will tell, but for now, privacy advocates see this as a beacon of hope.

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