Citizens' Issues
Facebook settles federal charges for violating users' privacy

While biggies like Google, Facebook and Twitter are forced to respect privacy rights of individuals, in our country, a government funded agency, which is collecting sensitive information under the Aadhaar number system, has no answers for breach of privacy

Last week social media giant, Facebook settled federal charges on deceiving consumers by divulging their private information and promised that they would not do it again. However, Facebook did not pay any fine or penalty and users' whose privacy was violated will not get any compensation.

According to a proposed settlement, Facebook promised to the Federal Trade Commission (FTC) that from now on, it would give a clear and prominent notice to consumers and obtain their express consent before sharing information beyond their privacy settings. The FTC had already established agreements with Google and Twitter for privacy standards.

All this was possible because it happened in the US. In our country, the union government itself is least bothered about privacy rights and had allowed its pet, the Unique Identification Authority of India (UIDAI), to collect private data like fingerprints and iris scan to enforce a tagging system called Aadhaar. But more about it later.

In a blog posting, Mark Zuckerberg, founder and chief executive of Facebook, said, "I am the first to admit that we've made a bunch of mistakes. In particular, I think that a small number of high profile mistakes, like Beacon four years ago and poor execution as we transitioned our privacy model two years ago, have often overshadowed much of the good work we've done."

"Even before the agreement announced by the FTC, Facebook had already proactively addressed many of the concerns the FTC raised. For example, their complaint to us mentioned our Verified Apps Program, which we cancelled almost two years ago in December 2009. The same complaint also mentions cases where advertisers inadvertently received the ID numbers of some users in referrer URLs. We fixed that problem over a year ago in May 2010," Mr Zuckerberg said in the blog.

He said, "In addition to these product changes, the FTC also recommended improvements to our internal processes. We've embraced these ideas, too, by agreeing to improve and formalize the way we do privacy review as part of our ongoing product development process. As part of this, we will establish a biannual independent audit of our privacy practices to ensure we're living up to the commitments we make."

Facebook has also created two new corporate officer roles and appointed Erin Egan as chief privacy officer for policy and Michael Richter as chief privacy officer for products. "These two positions will further strengthen the processes that ensure that privacy control is built into our products and policies. The announcement also formalises our commitment to providing you with control over your privacy and sharing -- and it also provides protection to ensure that your information is only shared in the way you intend," the Facebook founder said.

Jon Leibowitz, chairman of the FTC, said, "Facebook is obligated to keep the promises about privacy that it makes to its hundreds of millions of users. Facebook's innovation does not have to come at the expense of consumer privacy. The FTC action will ensure it will not."

The FTC complaint lists a number of instances in which Facebook allegedly made promises that it did not keep:

  • In December 2009, Facebook changed its website so certain information that users may have designated as private – such as their Friends List – was made public. They didn't warn users that this change was coming, or get their approval in advance.
  • Facebook represented that third-party apps that users' installed would have access only to user information that they needed to operate. In fact, the apps could access nearly all of users' personal data – data the apps didn't need.
  • Facebook told users they could restrict sharing of data to limited audiences – for example with "Friends Only." In fact, selecting "Friends Only" did not prevent their information from being shared with third-party applications their friends used.
  • Facebook had a "Verified Apps" program & claimed it certified the security of participating apps. It didn't.
  • Facebook promised users that it would not share their personal information with advertisers. It did.
  • Facebook claimed that when users deactivated or deleted their accounts, their photos and videos would be inaccessible. But Facebook allowed access to the content, even after users had deactivated or deleted their accounts.
  • Facebook claimed that it complied with the U.S.- EU Safe Harbor Framework that governs data transfer between the U.S. and the European Union. It didn't.

Coming back to India and privacy issues, the Aadhaar with its biometrics and the ability to facilitate convergence of information-bona fide or otherwise-has the potential to compromise privacy and put people in trouble. Vulnerability of securely-stored digital information to theft has been exposed by recent leaks that have surfaced both nationally and internationally.

This ambitious and expensive Aadhaar project uses biometric information like fingerprints, iris scans and face photos to create a UID number. The authority is roping in fat-profit organisations as its partners, which will very likely result in the database being used for targeted marketing. (Read: Fat profit institutions continue to board UID bandwagon ) In addition, many registrars have been roped in by UIDAI to undertake this enrolment. These agents are believed to be adding their own parameters while creating their own databases for business use. (Read: Is the UIDAI database vulnerable? )

Normally this should have rung an alarm bell. However, it seems there has been not reaction, let alone any action from UIDAI or the government. So, what is the control over these databases and what is there to prevent any unauthorised use of this data?
According to some of the diplomatic files published by WikiLeaks, it is now known that some US officials had been trying to collect biometric and such other sensitive identification information about politicians and bureaucrats from the United Nations and some countries like South Korea, China, Egypt, Indonesia, Malaysia, Syria and even India. In case of Aadhaar, we will not even know if someone had sold or procured our private information.




5 years ago

Agreed that UIDAI is controversial, but let's not be so rosy about Facebook either. I would rather take every word of Zuckerberg with a pinch of salt. He says all the issues were fixed long before,which infact is incorrect. Off late there have been many reports on the web about Facebook not respecting user's privacy, storing deleted data, keeping tracks of user's actions etc.

I would rather place UIDAI and Facebook in the same league.

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Water scarcity to become major issue in water-stressed India says CRISIL

Over the past 60 years, the annual per capita water availability in India has fallen 70% to 1544 cubic meter from 5177 cubic meter in 1951 and is expected to further fall to 1,140 cubic meter in 2050

The alarm on the continued availability of sufficient water to all consumers in India, both corporate and domestic, over the years has sounded. The per capita water availability in India, which is currently at 1,544 cubic meters in 2011 vis-à-vis the international benchmark 1,700 cubic meters, is projected to further shrink to 1,140 cubic meters by 2050, said CRISIL in a research report.

India’s population has increased from 361 million in 1951 to 1.21 billion in 2011. The number of cities with population of over 1 million has increased from 12 in 1981 and 23 in 1991 to 35 in 2001. Therefore, the per capita availability of water in the country as a whole has plummeted from 5,177 cubic meter per annum in 1951 to 1,544 cubic meter per annum in 2011, a drastic reduction of 70% in 60 years. With the per capita availability of water falling below 1,700 cubic meters, India has already acquired the unfortunate status of a ‘water-stressed’ nation. The situation is expected to deteriorate further as per capita water availability is expected to decline further to 1,342 and 1,140 cubic meters per annum by 2025 and 2050, respectively, the report said.  

Water is a resource that Indians have been able to take for granted until now. But that is no longer the case. Water, which is an integral part of the production process in many industries, has emerged as an issue that could have serious consequences for direct operations of a company, and its supply chains, brand reputation, and therefore, on growth opportunities and profit.

According to the report, growing scarcity and pollution of water, coupled with challenges arising out of climate change could pose serious risks to industrial and business operations in India. Given the likely impact of these risks on companies' financial performance, SEBI has made it mandatory for top 100 listed companies in terms of market capitalisation to submit Business Responsibility Reports (BRR), as a part of their annual reports. So far, only 39 Indian companies have released sustainability reports in adherence to the global reporting initiative.

Mukesh Agarwal, senior director, CRISIL Research, said, "Most companies continue to have a cavalier approach towards use of water and waste water discharge and consequently, have been forced to face physical, regulatory and reputational damages. This has often led to significant impact on the financial performance, and in select cases, companies have even had to shift or shut down their business operations. Indian companies must therefore manage their water usage and discharge in a responsible and sustainable manner."

Statistics from the report indicates that India has already acquired the status of a water-stressed nation. CRISIL Research conducted a comprehensive assessment of water disclosure practices of 500 publicly held companies in India. The study revealed that in 2010, only 30% of companies reported that they have company-level water policy for prudent management of water usage. Similarly, 22% of companies reported that they have policies to manage wastewater discharge. Only 3.3% of companies disclosed information on total quantity of water used and merely 1.5% reported the source from where water used is drawn. The study pointed out that sectors such as energy, materials and utilities are more proactive in disclosing information on wastewater discharge.

"Every company must adopt a comprehensive strategy to reduce water-related business risks as part of its overall risk management practices. Monitoring of water usage/waste water discharge, through proper accounting and reporting to the stakeholders/general public, must form the core of such a strategy and would be central to sustainable growth," said Sunil Sinha, head and senior economist, CRISIL.

CRISIL said water stewardship demonstrated by few Indian companies like ITC and Tata Motors need to be emulated by others to contain water related business risks. ITC trains and empowers farmers in watershed management. ITC has assisted farming communities in 22 districts across 7 states of India.

Tata Motors' first step was to create a perennial source of water by constructing a 350-metre-long stone dam to contain rainwater that came in through the natural watercourses within the perimeter. Building just one lake was not enough, so Tata Motors built more and today, there are six ponds and lakes, which are fed by rainwater and treated effluence of the factory. These lakes have become an extension of the effluent treatment plants (ETP), with the treated wastewater being retained by two ponds and two lakes, while allowing the excess to overflow from one water body to the next. As a result of this progressive biological oxidation, the quality of the treated effluence is far superior to the quality of the receiving water body into which it flows. The once arid scrubland with cupfuls of quickly evaporating rainwater has now become home to broods of birds and aquatic creatures, the report said.



pinakin mamtora

5 years ago

The future wars may well be fought over water. May I request Team MoneyLife and all ML readers to please suggest names of companies who will stand to gain from the ensuing water shortage in India: water-treatment/conservation/consultancy/infrastucture & all other water-related companies may well be the multibaggers of this decade. May be ML can do a in-depth (well, that's a given with ML!) cover story on this unique futuristic investment theme of this Century. My mouth is already 'watering' at the prospects!



In Reply to pinakin mamtora 5 years ago

Yes, the 3rd World War is likely to be over water.

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