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5/8/2012
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Myspace Settles FTC Privacy Complaint

Now faded social network must tell the truth about how it handles personal information and undergo privacy audits for the next two decades.

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Myspace on Tuesday settled charges brought by the Federal Trade Commission that it made false promises about protecting user data.

In its privacy policy and public statements, the faded social network promised not to share users' personally identifiable information with third parties without first asking permission and promised not to use personally identifiable information to customize ads.

Myspace violated those promises, according to the FTC. The company provided third-party advertisers with users' Friend IDs, which are account numbers linked to basic personal information. In so doing, the company enabled advertisers to create profiles linked to individual identities.

The FTC is not claiming that any ad company has made such a profile and the agency declined to discuss whether it might investigate whether any advertising network has compiled personal profiles using data gathered from Myspace. The settlement addresses the gap between Myspace's words--its privacy policy--and its actions.

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Regardless, advertisers didn't need to create Myspace user profiles because Myspace provided assistance with the delivery of personally targeted ads.

From January 2009 through June 2010--a year before the social network was sold for $35 million to Specific Media and celebrity Justin Timberlake--most of the ads displayed on Myspace were delivered via the Fox Audience Network (FAN), an ad network affiliated with Myspace.

To enable FAN to target ads, Myspace included the Friend ID, age, and gender of Myspace users in ad requests from Myspace Web pages, the FTC complaint says. And it did so in unprotected plain text. When FAN's ad inventory had no ad to place, the ad request was handed off to a third-party ad network to be filled, and the same personal information was provided. None of this was permissible under the terms of the Myspace privacy policy.

The settlement requires that Myspace cease misrepresenting its privacy promises. It also requires that Myspace set up a privacy program to protect users' information and to submit to independent third-party privacy audits every two years for the next 20 years.

Myspace might want to work on scheduling a site visit immediately: With Facebook, Google, and Twitter, among others, already under FTC orders to submit to biennial privacy audits, finding an available privacy inspector could be something of a challenge.

The Enterprise 2.0 Conference brings together industry thought leaders to explore the latest innovations in enterprise social software, analytics, and big data tools and technologies. Learn how your business can harness these tools to improve internal business processes and create operational efficiencies. It happens in Boston, June 18-21. Register today!

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