OTTAWA - Facebook has agreed to change some of its privacy policies in response to criticism from a Canadian watchdog over how much personal information it was keeping on file and sharing with third-party application developers.

The changes, such as altering language in its privacy policy, will take place within the next month or so. More complicated technical changes will take up to a year.

"We are satisfied that with these changes Facebook is on the way to meeting the requirements of Canada's privacy law," federal privacy commissioner Jennifer Stoddart said this morning after revealing the popular social networking site has agreed to change the way it collects, stores and shares personal data within a year. "The privacy of people using the site, not only in Canada but around the world, will be far better protected.

"This is hugely significant," Stoddart continued. "Facebook has 12 million users in Canada alone - that is about a third of our population - and well more than 200 million users of Facebook worldwide. All those users will have a far clearer view of how they perceive information is being shared once Facebook implements our recommendations. They will also have far more control over what they are sharing and with whom."

Richard Allan, director of European privacy and policy at Facebook, noted Stoddart had praised the company for its cooperation.

"They shared with us as a common goal making the Internet more privacy-friendly for users around the world," Allan said in a conference call from London.

Stoddart released a scathing report last month that said Facebook violated Canadian privacy legislation by keeping the personal information of its millions of users around the world on file indefinitely even after they deactivate their accounts.

The in-depth investigation began when students at the Canadian Internet Policy and Public Interest Clinic at the University of Ottawa filed a complaint to the privacy commissioner identifying potential problems with Facebook's privacy policies and practices.

Stoddart had also criticized Facebook for sharing user information with third-party software developers - almost a million around the world - who create the popular applications like quizzes and games.

Facebook has agreed to retrofit its application platform so that developers cannot obtain any personal information without express consent from users for each of the categories it wants to access.

The company will also make it clear to users wishing to close their accounts that they have the choice between deactivation - which will allow Facebook to keep information on file - and deletion, which will erase all personal information from its database.

It will also update its privacy policy so that users can provide "meaningful consent" to letting Facebook keep their profile pages up after they die so that friends can post comments and pay tribute.

It will also include more information about the privacy of non-users.

Stoddart said her report showed it is possible to protect privacy online.

"Our investigation has demonstrated that our law is pragmatic and it works for something as new as social networking," Stoddart said.

She added that users must remember they are ultimately responsible for protecting their own privacy and urged them to read policies before signing up.

"Users must constantly bear in mind that once something is online, it's there for eternity," she said.

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The company also said it did not have an estimate how much the changes would cost.

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