My editor, Michelle, was at a birthday party for her son’s friend recently, when the mom mentioned a company she liked called Joymode. Minutes later, an ad for Joymode appeared on Michelle’s Facebook newsfeed.

When she told me about it, we both wondered whether the urban legend could be true. Does Facebook really listen to our conversations to serve us ads?

“I swear I think you guys are listening.” That’s how CBS This Morning host Gayle King put it just this week when she spoke with Adam Mosseri who heads up Instagram, which is owned by Facebook.

“Can you help me understand how I can be having a private conversation with someone about something I’m interested in seeing or buying, and an advertisement for that will pop up on my Instagram feed?” King asked. “I haven’t searched for it, I haven’t talked to anybody about it.”

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Well, Mosseri and the company deny that persistent perception every which way to Tuesday.

“(W)e don’t look at your messages, we don’t listen in on your microphone, doing so would be super problematic for a lot of different reasons,” Mosseri insisted in the CBS interview. “But I recognize you’re not gonna really believe me.”

So why do these ads keep appearing there with regularity, and why are so many people convinced Facebook isn’t telling the truth?

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“Facebook is eavesdropping on you,” says Jamie Court, the president of Los Angeles-based non-profit Consumer Watchdog. “It’s just in a different way.”

The truth is, Facebook tracks us in ways many of us don’t even realize and is so good at it, we think it’s monitoring our conversations. Instead, it uses sophisticated demographic and location data to serve up ads.

“It’s like they’re stalking you,” Court says. “They put all sorts of circumstantial evidence together, and you’re marketed to as if they’re listening to your conversations.”

In the case of Michelle’s Joymode ad, we asked Facebook point blank to help us decipher how this happened, and it sent us to the “Why you’re seeing this ad” feature that’s included in the menu of all Facebook ads. (Three dots at the top right of the page.)

The answer was written in marketing speak. Michelle saw the ad because Joymode wanted to reach “people who may be similar to their customers,” and people over 18 who live in Los Angeles.

That offers no real clarity on why it showed up when it did.

However, here’s our translation, with an assist from Court. Facebook’s algorithm figured, since she was with her friend of a similar age and both had children, that Michelle would be equally interested in a brand the mom had liked once. It deduced that both were in the same geographic location together — where the friend’s Joymode subscription was actively in use.

And if she had posted photos from the party on Instagram, more data clues could have been collected to solidify the interest connection.

“The FB AI engine can determine intent from textual and visual material you provide,” tech industry veteran Phil Lieberman notes. “With intent, they can find product and services that you might be interested in. This is all about ‘recommender systems’ similar to what Amazon offers, but FB has more information on an ongoing basis to determine what you might be interested in buying.”

Atlanta-based Facebook user Lily Leiva came up with a similar explanation for the Finnish Baby Box, briefly mentioned at a dinner with a friend. The ad for the $500 maternity box appeared in her newsfeed the next day. “I found it so unnerving,” she said. “Facebook was trying to predict my behaviour.”

Her theory was that Facebook pushed the ad to her because she had been with her friend, who had liked the product.

“Facebook says they don’t listen to our conversations,” she said. “But they don’t say they don’t track you.”

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In fact, the social network actually is quite open about the tracking.

Most of us know that every time we like a post, leave a comment and tag a friend, that gives Facebook even more ammunition to serve us ads. Every check-in, every hashtag, every comment is more grist for the mill.

But wait, there’s more …

The social network admits that it collects the “content, communications and other information,” including photographs and videos, accounts, hashtags and groups we are connected to. It notes what posts, videos and other content we view and even collects our payment information, including credit or debit card number, billing and shipping info.

“There are many other ways for Facebook to target you with ads based on data they’ve collected and put through algorithms,” privacy advocate Paul Bischoff says. “Remember that Facebook can track what you do on other websites and apps that use Facebook plug-ins, logic and widgets.”

Facebook’s single sign-on offers another door to your data. If you’ve used your Facebook account to sign in on a website, to subscribe to an email, make a purchase or snag a coupon, Facebook can collect data of what you do, like view a webpage or add a product to an online shopping cart.

The social network tracks us on mobile phones if we give permission, meaning the social network knows where you are, even with the app closed. It leaves “cookie” data on our devices for tracking, “to create personalized products that are unique and relevant to you.”

On permissions, Facebook doesn’t entice you to allow non-stop tracking even with the app closed. Instead, as it did to this reporter recently, a post on Facebook-owned Instagram was about to go live, when a pop-up window urged him to “Turn on Location Services,” to automatically select the city tag.

There are steps we can take to limit Facebook’s tracking, but face it — if you’re using the Facebook app and interacting with people, Facebook can get most of everything they need. “We may still understand your location using things like check-ins, events, and information about your internet connection,” Facebook says in its FAQ on how its Location Settings work.

In fact, Aleksandra Korolova, an assistant professor at the University of Southern California, did a study of Facebook’s location tracking and says that even if you opt-out, Facebook will still keep tabs on you.

“Even when we explicitly exercise all location controls,” she said, “Facebook still learns the locations we visit and exploits it for ads.”

In a widely read Medium post published in December 2018, Korolova noted the downside of being tracked. “The locations that a person visits and lives in reveal a great deal about them,” she writes. “Their surreptitious collection and use in ad targeting can pave way to ads that are harmful, target people when they are vulnerable, or enable harassment and discrimination.”

The issue of privacy can become particularly acute when there’s the presumption or wish for confidentiality — say, during a therapist visit or at an Alcoholics Anonymous meeting.

What to do? Security expert Will Strafach is launching a new smartphone app, Guardian Firewall, in July, to stop companies from tracking. “The electronic devices you bought and own should not be snitching on you,” he says.

The app costs $9.99 (U.S.) monthly, and he says will stop Facebook and others from peering into your data most of the time.

“These companies are stealing data from your pocket, from the phones you paid for,” he says. “They are wasting your battery life, and most people don’t even realize it’s happening.”

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