Source: Diane Swanson, 785-532-4352, swanson@k-state.edu
News release prepared by: Tyler Sharp, 785-532-2535, media@k-state.edu

Monday, Jan. 24, 2011

SOCIAL NETWORK'S POLICIES, LOBBYING EFFORTS RAISE CONCERNS WITH BUSINESS ETHICS EXPERT

MANHATTAN -- Some recently reported practices by the social-networking giant Facebook may lean toward unethical status or may need to be more transparent, according to a Kansas State University business ethics expert.

Facebook's privacy settings and policies have been under scrutiny because of loopholes allowing the transmission of personal information to Internet tracking and advertising sites without consent. This practice raises many ethical concerns, said Diane Swanson, professor of management and chair of the Business Ethics Education Initiative at K-State.

"This is where a growing source of revenues is," Swanson said. "But because users can enter so much personal data, the question is how much incentive does Facebook have to handle this on behalf of users? There's a whole issue of trust here."

Officials from Facebook have denied any privacy breaches to Congress, but have responded to the criticism by proposing changes to privacy policies and a plan to encrypt user IDs. Swanson says the problem with relying on users to customize their preferences in the privacy settings is that some of Facebook's policy revisions have been relatively unpublicized. This means users may not be aware of privacy amendments, leaving many to opt out of the revisions.

"I think it's a very fluid and complex situation. The bottom line is user beware," she said.

How Facebook is handling attempts to legislate online privacy also raises concerns about potential conflicts of interest in public policy, Swanson said. Facebook recently contributed $6,600 to lobbying against the Social Network Privacy Act in California, which would prevent social networking sites from disclosing addresses and phone numbers of minors. The legislation stalled in the California Assembly. And, according to recent news reports, Facebook is increasing its lobbying presence in Washington, D.C.

Swanson said the lobbying efforts are an example of the imbalance of power between businesses and consumers.

"In their desire to accrue revenue, corporations sometimes fail to factor social concerns into decisions," she said. "Ultimately it is up to the government to provide oversight on behalf of ordinary citizens. When legislators face the extraordinary power of lobbyists, it casts doubt on the democratic process. One need only look at the power of lobbyists in Washington, D.C., to grasp the extent of the problem.

"And now when national lawmakers are considering changes to privacy laws, we see Facebook responding by increasing its presence in Washington," Swanson said.

Despite the privacy concerns, Facebook remains extremely popular. Swanson said Facebook's status as a dominant social network plays a role.

"I doubt that Facebook users see that they have a choice to go to another venue that would serve their immediate interests as well as this form of data technology," she said. "It would almost be like dropping out of a club at school. Where do you go in the short run?"