Senator Urges FTC to Regulate Social Network Sites

Published May 7, 2010

Sen. Chuck Schumer (D-NY) has embarked on a carrot-and-stick approach to regulate user privacy on the Internet—meeting with executives at Facebook after asking the Federal Trade Commission to provide enforceable rules to social networking sites on how to handle users’ information.

Schumer wrote a letter to the FTC on April 26 asking the agency to “examine the privacy disclosures of social-networking sites to ensure they are not misleading or fail to fully disclose the extent to which they share information . . . [and] provide guidelines for use of private information and prohibit access without user permission.”

The letter got the attention of Facebook, the most popular social networking site in the world, with approximately 400 million members. Company representatives met privately with Schumer and some of his staffers two days after the senator sent his letter to the FTC.

Facebook: No Big Deal
Elliot Schrage, global communications vice president for Facebook, said the company had a productive meeting in Schumer’s office.

“We appreciate their thoughts and look forward to their assistance in helping make sure users understand the controls they have over their information and what happens with information they share,” Facebook spokesman Andrew Noyes said in a post-meeting conference call with reporters.

Meanwhile, Schrage suggested privacy concerns expressed about Facebook are overblown.

“Many of our innovations, when they were first introduced, were not received well by the community,” Schrage said, adding such concerns popped up when Facebook first moved from a project of a couple of Harvard students in 2005 to a global phenomenon.

Once the public became more accustomed to sharing information online, users “saw the benefits” of the service and concerns died down, he said.

Wants Enforceable ‘Safeguards’
Schumer says he wants to ensure private information submitted to social networking sites such as Facebook, MySpace, and Twitter is not “improperly”given away to third parties, or at least not without the user’s consent.

“These sites have helped reconnect old friends, allow families from far away to stay in touch, and created new friendships,” Schumer said. “Overall they provide a great new way to communicate.

“As these sites become more and more popular, however, it’s vitally important that safeguards are in place that provide users with control over their personal information to ensure they don’t receive unwanted solicitations,” the senator added.

‘Opt-Out’ Already an Option
Facebook, however, already has opt-out provisions within its user agreement, so people who want to avoid unsolicited contacts can do so, notes Scott Testa, professor of business administration at Cabrini College in Philadelphia.

Michael Priem, CEO of USDM, an interactive digital media company based in Corpus Christi, Texas, suggests Schumer is finding a problem where none exists.

“The whole notion of social networking has worked itself into the mainstream of society today,” Priem said. “The whole reason social networking has caught on in this country is that it gives people a voice. As consumers, we strive for that.”

Could Cost Jobs
Priem says the experience of food company Hershey shows the negative effect of attempting excessive restrictions on social networks. Hershey tried to restrict how people could use its image and logo on the company’s social media site.

But people are striving to interact with the company, so by pushing people away in this manner, Hershey received plenty of bad PR.

Another problem with third-party restrictions—whether from the private sector or government—is that the Internet and Facebook are worldwide phenomena, not just domestic methods of communication. Any restrictions placed here would just push social networking companies to move their operations overseas, costing American jobs and tax revenue.

Keep Government Out
Evan Bailyn, founder of First Page Sage, a social media company based in New York, says, “there would be so many downsides if the government got involved.”

“The main issue would be the pure inhibition of progress on the Internet,” Bailyn said. “People are looking for new ways to discover fresh things that we like. I’m much more interested in whether 10 of my Facebook friends liked a particular movie than going through a Google search of movie reviews. Getting the government involved would slow down innovation.”

That would include slowing down the evolution of Facebook and other social networking sites from their current booming growth, Bailyn added.

“Facebook works fairly well as it is set up right now,” Bailyn said. “If people didn’t like the way Facebook was operating, they wouldn’t continue to spend time on Facebook pages and would withdraw from the social network.”

Phil Britt ([email protected]) writes from South Holland, Illinois.