How Facebook Could Reassure Users Their Privacy Is Protected

(Bloomberg) -- Facebook's annual meeting on May 1 opened as developers were “steaming” about the social network's efforts to fix the way user data is shared with third parties. Some vowed to boycott the conference, according to the New York Times; others planned to confront executives about policy changes that make it harder for developers to access data about Facebook users.

Under new rules announced last month, for example, developers can no longer see posts by Facebook users and can't access data from people who haven't used their apps over the past three months. Facebook is also investigating companies that previously used large amounts of data about their users.

But these measures don't seem to have stemmed accusations that Facebook is violating privacy by allowing third parties to see user data. The persistent controversy led the social media giant to delay the launch of a new smart home product — similar to Amazon's Echo — out of fear the device would raise even more privacy concerns.

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Facebook needs to do something dramatic to address the outrage. Here's a solution: The company should give customers the option to sell their personal data to researchers and marketers. Users could choose what data (if any) is shared, including names, pictures, pieces of information listed on profiles, contact information or posts. They would also choose the organizations (if any) that could use it, including advertisers, market researchers, political consultants or academic researchers. Users would earn small payments for the data, and the more information they share and the more organizations they allow to access it, the more money they'd make.

This would solve lots of problems for Facebook. First, it would address ethical concerns by establishing the principle that people own their data. It would be hard for even the staunchest privacy advocates to argue against this.

Second, it would give people an incentive to share their data, giving Facebook a way to continue making profits. The ability for users to earn money would be a powerful enticement and could drive even more people to the site. To be sure, paying people for data Facebook currently harvests for free would cut into the company's profits. But not taking major action to address privacy concerns could cost more. The company's staggering $50 billion loss in market value during the first week of this crisis shows just how seriously users take this issue. 

These measures could help quell the storm by giving people who don't want their data shared an incentive to remain on Facebook, since they could prevent their information from being used by third parties. This is important, as users who allow their data to be shared would be less likely to stay on the network if they couldn't connect with a lot of their friends.

Of course, Facebook would have to carefully police and shut down fake accounts set up by people trying to make money. But the company already needs to do this to help guard against the kinds of made-up stories that proliferated on its platform during the last presidential election.

For an example of how all of this could work, Facebook should check out CoverUs, a new app that allows users to sell data about their health, that was cofounded by Andrew Hoppin and Christopher Sealey, a former colleague of mine at the Peter G. Peterson Foundation.

For now, users are mad at Facebook for sharing some of their data with third parties and third parties are mad at Facebook for not sharing more user data. Allowing users to control and sell their data is a solution that could satisfy — and perhaps enrich — everyone involved. 

To contact the author of this story: Kara Alaimo at kara.s.alaimo@hofstra.edu.

To contact the editor responsible for this story: Max Berley at mberley@bloomberg.net.

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