Facebook Inc. (FB) Drops Photo Tagging in Europe

Facebook Inc. (NASDAQ:FB) has been under the privacy microscope in Europe in recent months, as the European Commission has been working to enforce its regulations requiring consent from Internet users before compiling personal information. And if there is one Web site that has been known for compiling personal information …

One of the features on Facebook Inc. (NASDAQ:FB) that has been targeted by an Irish auditor is the “photo tagging” feature, in which users can identify faces in photos and “tag” themselves and other users seen in photos. But the facial recognition feature has been a target of European privacy regulations, and the Irish Data Protection Commissioner submitted that among several suggested privacy and security changes to the social-networking site.

Rather than including a consent form on Facebook Inc. (NASDAQ:FB) for the photo tagging feature – which has been the common resolution to Europe’s privacy and security issues – the company decided to disable the tagging feature – at least for now, in order to be in compliance with the regulations and not face sanctions. The DPC stated recently since the audit report was submitted last winter, it has received good and cooperative response from Facebook Inc. (NASDAQ:FB), but there may be still some issues to be resolved before the site passes the audit.

In a statement, Facebook Inc. (NASDAQ:FB) stated, “As our regulator in Europe, the Irish Office of the Data Protection Commissioner is constantly working with us to ensure that we keep improving on the high standards of control that we have built into our existing tools. This audit is part of an ongoing process of oversight, and we are pleased that, as the Data Protection Commissioner said, the latest announcement is confirmation that we are not only compliant with European data protection law but we have gone beyond some of their initial recommendations and are fully committed to best practice in data protection compliance.”

Investors in Facebook Inc. (NASDAQ:FB) stock  – like hedge-fund manager George Soros of Soros Fund Management – will likely be pleased that Facebook will keep itself very visible in Europe and is taking the steps to protect Europeans’ privacy. Do you think Facebook should take similar steps in the U.S. just because, or should it do it when it’s forced to do so?