Some people believe that with Social Plug-ins and the “Open Graph,” Facebook is overreaching. One of those people is now NY Senator Charles Schumer.

For quite some time I’ve been saying and speculating that if “the industry” isn’t careful the regulators will spring into action. Today Senator Schumer called on the FTC to create guidelines and regulate social networking privacy, motivated apparently by Facebook’s Open Graph announcements last week.

Here’s an excerpt from Schumer’s letter:

Today, U.S. Senator Charles E. Schumer urged the Federal Trade Commission (FTC) to provide guidelines for social networking sites, like Facebook, Myspace, and Twitter on how private information submitted by online users can be used and disseminated. Schumer’s call to the FTC comes on the heels of recent reports that Facebook has decided to provide user data to select third party websites and has begun sharing personal profile information that users previously had the ability to restrict access to. These recent changes by Facebook fundamentally change the relationship between the user and the social networking site. Previously, users had the ability to determine what information they chose to share and what information they wanted to keep private. Recent policy changes are fundamentally changing that relationship and there is little guidance on what social networking sites can and cannot do and what disclosures are necessary to consumers.

Under new policies, users must go through a complicated and confusing opt-out process to keep private information from being shared with third party websites. Additionally, Facebook has also created a new system whereby ‘interests’ listed by users on their personal profiles are automatically aggregated and shared as massive web pages. Users used to have the ability to keep this information private if they chose. These new common interest pages are a gold mine of marketing data that could use by used for spam and potentially scammers, intent on peddling their wares.

Schumer and his staff may or may not fully understand what Facebook is trying to do or the benefits the company asserts it’s providing to users and publishers. But this should be taken seriously and could be the beginning of a long-anticipated move into online privacy regulation by the feds.

The IAB (and Facebook itself) should head this off at the pass with voluntary moves and clearer disclosures.

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