The fact that Facebook found itself addressing a regulatory charge of some kind should have come as no surprise, given the brouhaha about annual changes to its user interface and profile privacy settings. Little wonder, too, that such a conflict would have widespread implications for digital marketing.
Late last month, Facebook reached an agreement with the Federal Trade Commission regarding accusations that it misled users about the privacy of data shared on the site. The company "deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public," the FTC said in its announcement of the settlement.
The settlement requires audits of Facebook privacy practices. VentureBeat has reported that this has led to a reorganization. Five product groups must report to CEO Mark Zuckerberg. This will eliminate questions about how informed leadership should be about product development.
The various reactions to the Facebook news are fascinating to watch -- and not just because of the company's place in social media and its ability to connect 800 million people to events, articles, and one another. Many people have criticized Facebook's privacy measures, but numbers suggest that its use continues unabated. Participants reportedly spend as many as 15 hours per month on the site. AllAnalytics.com community editor Shawn Hessinger captured Facebooks relationship with privacy best in his comment, "Facebook is simply the poster child for this kind of problem today, but there is no evidence it has hurt the company's popularity or revenue."
The Facebook-FTC agreement reflects the new strategic considerations companies must make about data access and management. Social media contribute unstructured data to the analytics mix, but the act of sharing and connecting through APIs can easily change customer data from a competitive advantage to personally identifiable information that falls under government protections.
This challenges technology companies in a number of key ways. For one thing, the program and coding languages on which Websites, platforms, and applications are built must reflect a deeper consideration of product and service delivery, instead of solely specific technical purposes. Such underlying technologies foster consumer convenience, but some leave companies struggling to comply with privacy and other regulations. Search Engine Watch reported that Google is working to create an internal system for complying with a new UK privacy law on cookies -- the text files that serve as the basis for Web analytics, browser bookmarks, and a number of digital applications.
In addition, the expanded application of computer languages and data, which can start innocently enough as a way to measure traffic and assess a visitors digital experience, can become problematic when analytics data is combined with other information. A Carnegie Mellon University study said that personally identifiable information is being increasingly exposed as so much data is collected and synced. As a result, it is becoming "increasingly difficult to provide useful data with privacy protections."
Another challenge in this new age is how to deal with data stewardship. Do companies need to announce how they're handling data privacy? The knee-jerk response is "Yes," but in defending themselves against legal implications, companies can be forced to expose methodologies that give them a competitive advantage. Could you imagine KFC revealing its blend of herbs and spices, or Coke revealing its secret formula? These companies make legendary efforts to protect the very essence of what makes their products special.
Lawsuits always have been one tool in technological warfare to force a competitor to reveal its secrets. As more technology enters the public domain, companies will have to strike the balance between explaining how privacy is maintained and not explaining the algorithms and proprietary designs that make such maintenance possible.
Company leaders must be aware of how information is flowing within their organizations. The advent of data management, from analytics review to studying big data, signals an increasing capability of merging data sources. Such a merger can put personally identifiable information at risk. So company leaders must be vigilant about information management -- not just for strategic growth, but for corporate survival.