Facebook Inc. (FB) Facing More Privacy Scrutiny in U.S.?

Facebook Inc. (NASDAQ:FB) seems to be continuously looking for ways to leverage its vast chest of user data to drive its advertising partnerships and increase effectiveness. But talk of a new collaborative effort to further leverage that data with offline compilation is drawing the attention of some privacy watchdog groups and is leading to letters addressed to the Federal Trade Commission.Facebook Inc (NASDAQ:FB)

Facebook Inc. (NASDAQ:FB) is generating excitement from advertisers which have already seen growing effectiveness with their work on the Facebook platform. Now there is expected to be an announcement soon that Facebook will be unveiling a program that will provide the opportunity for advertisers to connect their offline customer lists with existing Facebook user accounts and offline third-party databases to develop even more targeted advertising both online and offline. Facebook is claiming that it will match the three databases anonymously, based on e-mail addresses and phone numbers.

While names and mailing addresses are claimed to not be used to do the matching, Facebook Inc. (NASDAQ:FB) is getting some pushback over this project. Some privacy advocates have been wary about the combination of online and offline data sharing which basically removes consumer control of their own personal information. The Center for Digital Democracy is writing to the FTC, the General Accountability Office and lawmakers, resuming a push to tighten privacy guidelines in the U.S. involving data collection and selling.

“Clearly the integration of these powerful databases and purchasing records to be used for targeting is a serious privacy concern and needs to be investigated,” said Jeff Chester, director of the CDD. “We need new privacy controls and marketing policies to protect sensitive information.”

Facebook is supposed to be working with companies like Datalogix and Acxiom as part of this project, but these data-broker companies are apparently embroiled in FTC investigations into privacy practices of these data brokerages.

How do you think this project will affect Facebook inc. (NASDAQ:FB)? Give us your thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

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