How Facebook Is Redefining Privacy

Nearly 500 million people worldwide live their lives — or versions of them — on Facebook. Is there a limit to how much we'll share? CEO Mark Zuckerberg is betting there isn't

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Artwork by Yuji Yoshimoto. Photograph by Tom Schierlitz for TIME.

Sometime in the next few weeks, Facebook will officially log its 500 millionth active citizen. If the website were granted terra firma, it would be the world's third largest country by population, two-thirds bigger than the U.S. More than 1 in 4 people who browse the Internet not only have a Facebook account but have returned to the site within the past 30 days.

Just six years after Harvard undergraduate Mark Zuckerberg helped found Facebook in his dorm room as a way for Ivy League students to keep tabs on one another, the company has joined the ranks of the Web's great superpowers. Microsoft made computers easy for everyone to use. Google helps us search out data. YouTube keeps us entertained. But Facebook has a huge advantage over those other sites: the emotional investment of its users. Facebook makes us smile, shudder, squeeze into photographs so we can see ourselves online later, fret when no one responds to our witty remarks, snicker over who got fat after high school, pause during weddings to update our relationship status to Married or codify a breakup by setting our status back to Single. (I'm glad we can still be friends, Elise.)

Getting to the point where so many of us are comfortable living so much of our life on Facebook represents a tremendous cultural shift, particularly since 28% of the site's users are older than 34, Facebook's fastest-growing demographic. Facebook has changed our social DNA, making us more accustomed to openness. But the site is premised on a contradiction: Facebook is rich in intimate opportunities — you can celebrate your niece's first steps there and mourn the death of a close friend — but the company is making money because you are, on some level, broadcasting those moments online. The feelings you experience on Facebook are heartfelt; the data you're providing feeds a bottom line.

The willingness of Facebook's users to share and overshare — from descriptions of our bouts of food poisoning (gross) to our uncensored feelings about our bosses (not advisable) — is critical to its success. Thus far, the company's m.o. has been to press users to share more, then let up if too many of them complain. Because of this, Facebook keeps finding itself in the crosshairs of intense debates about privacy. It happened in 2007, when the default settings in an initiative called Facebook Beacon sent all your Facebook friends updates about purchases you made on certain third-party sites. Beacon caused an uproar among users — who were automatically enrolled — and occasioned a public apology from Zuckerberg.

And it is happening again. To quell the latest concerns of users — and of elected officials in the U.S. and abroad — Facebook is getting ready to unveil enhanced privacy controls. The changes are coming on the heels of a complaint filed with the Federal Trade Commission (FTC) on May 5 by the Electronic Privacy Information Center, which takes issue with Facebook's frequent policy changes and tendency to design privacy controls that are, if not deceptive, less than intuitive. (Even a company spokesman got tripped up trying to explain to me why my co-worker has a shorter privacy-controls menu than I do.) The 38-page complaint asks the FTC to compel Facebook to clarify the privacy settings attached to each piece of information we post as well as what happens to that data after we share it.

Facebook is readjusting its privacy policy at a time when its stake in mining our personal preferences has never been greater. In April, it launched a major initiative called Open Graph, which lets Facebook users weigh in on what they like on the Web, from a story on TIME.com to a pair of jeans from Levi's. The logic is that if my friends recommend something, I'll be more inclined to like it too. And because Facebook has so many users — and because so many companies want to attract those users' eyeballs — Facebook is well positioned to display its members' preferences on any website, anywhere. Less than a month after Open Graph's rollout, more than 100,000 sites had integrated the technology.

"The mission of the company is to make the world more open and connected," Zuckerberg told me in early May. To him, expanding Facebook's function from enabling us to interact with people we like on the site to interacting with stuff our friends like on other sites is "a natural extension" of what the company has been doing.

In his keynote announcing Open Graph, Zuckerberg said, "We're building a Web where the default is social." But default settings are part of the reason Facebook is in the hot seat now. In the past, when Facebook changed its privacy controls, it tended to automatically set users' preferences to maximum exposure and then put the onus on us to go in and dial them back. In December, the company set the defaults for a lot of user information so that everyone — even non-Facebook members — could see such details as status updates and lists of friends and interests. Many of us scrambled for cover, restricting who gets to see what on our profile pages. But it's still nearly impossible to tease out how our data might be used in other places, such as Facebook applications or elsewhere on the Web.

There's something unsettling about granting the world a front-row seat to all of our interests. But Zuckerberg is betting that it's not unsettling enough to enough people that we'll stop sharing all the big and small moments of our lives with the site. On the contrary, he's betting that there's almost no limit to what people will share and to how his company can benefit from it.

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