Wednesday, March 30, 2011

Google (GOOG), FTC Reach Agreement over Buzz

In an agreement with the FTC, Google (NASDAQ:GOOG) agreed to allow its privacy procedures to undergo an independent review every two years, along with a requirement for users to opt-in before privacy changes are put into place.

In a blog post today, Google (GOOG) outlined an agreement with the FTC over privacy concerns connected to the release of Google Buzz in February of 2010. Specifically, if users took no action to change defaults, Google disclosed on users' Google profile a list of Gmail contacts. Those contacts were chosen by Google if the user had frequently or recently emailed or chatted with them (among other factors).

Google was relatively quick with a fix (which was to make Google profiles private) but the damage had already been done to Google's reputation for privacy.

The privacy breech lead to a well publicized stalking case as well as showing that a former Google Lobbyist and current White House staffer kept in close contact with his former Google colleagues, a double whammy for Google.

If the opt-in privacy disclosure requirements become a baseline (and they haven't) for tech/social companies, what affect will this move by the FTC have on Facebook? Facebook changes user privacy settings quite frequently and requiring users to opt-in each time could slow down their rate of change.

Google was trading at $584.74, up $3.01, or 0.52 percent, as of 1:05 PM EDT.


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