Suit: Facebook ad program invaded privacy

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Facebook, the world's largest social-networking site, is facing a class-action lawsuit charging that its controversial advertising program violated online privacy and computer fraud laws.A group of plaintiffs filed the suit in U.S. District Court in San Jose, Calif., against Facebook and several other companies, including Blockbuster, Fandango, Overstock.com and Hotwire.com, that participated in the unpopular advertising service, which shared information about users' activities with the social network.Facebook spokesman Matt Hicks said this week the company has not yet been served with the lawsuit. Last year, Facebook CEO Mark Zuckerberg apologized for the controversial program, allowing users to turn it off completely.The lawsuit, which covers the period Nov. 7 through Dec. 5, 2007, alleges that Facebook collected and broadcast personal data about users without their permission to "enhance (Facebook's) profitability and revenue through advertising." For instance, when someone purchased movie tickets on Fandango -- one of the affiliated Web sites -- that information was shared with the network, regardless of whether the person was a Facebook user."Thus, no consent was sought, nor was any consent obtained from persons who utilize the Facebook Beacon Activated Affiliate's Web site who were not Facebook members," the lawsuit said. "Even with respect to Facebook users, the Beacon program ... did not obtain any consent prior to the communication of identifying transactional information to Facebook."Facebook rolled out Beacon in the fall of 2007, shortly after Microsoft invested $240 million for a 1.6 percent stake in the Palo Alto, Calif.-based social network. While anticipated to revolutionize social media advertising, the program drew angry protests. More than 70,000 Facebook users signed a petition, prompting Zuckerberg to apologize and give users the ability to opt out of the program, which was later upgraded."I think Facebook is still trying to make Beacon work, and the roots of what they are doing make sense," said Debra Aho Williamson, a senior analyst with eMarketer. "But if people keep thinking that their privacy is being violated, Facebook has to listen to its users because without users there will be no Facebook."Jeff Chester, executive director of the Center for Digital Democracy, noted that despite the tweaks in the program, most users still have no idea how their personal data are being used."It's a digital breath of fresh air, and Facebook needs to be held accountable," Chester said of the lawsuit. "The lawsuit and public outrage over Beacon forced Facebook to backpedal on its plans, but the fact of the matter is that Facebook is a black data collection box."(E-mail Anastasia Ustinova at austinova(at)sfchronicle.com.)(Distributed by Scripps Howard News Service, www.scrippsnews.com.)