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Recent claims that Facebook’s ad program, Beacon, is more intrusive than many expected is causing problems for the social network.  PCWorld reports that it “goes much further than anyone has imagined in tracking people’s Web activities outside the popular social networking site.  Beacon will report back to Facebook on members’ activities on third-party sites that participate in Beacon even if the users are logged off from Facebook and have declined having their activities broadcast to their Facebook friends.”  This is the finding of Stefan Berteau, a senior research engineer at CA’s Threat Research Group.

Criticism from MoveOn.org, which put up a petition in an effort to force Facebook to make Beacon strictly opt-in, succeeded in forcing the network’s hand.  The petition states, “Sites like Facebook must respect my privacy. They should not tell my friends what I buy on other sites–or let companies use my name to endorse their products–without my explicit permission.”

Techcrunch has reported that Overstock.com and Coca-cola backed out of their Beacon deals, and that Travelocity is “having doubts.”  Carol Kruse, Coke’s vice president of global interactive marketing  told the New York Times, “We have adopted a bit of a ‘wait and see’ as far as what we are going to do with Beacon because we are not sure how consumers are going to respond.”  She also stated, ““I, like you, certainly understood that it would be opt-in. That’s what I heard before as well as what I heard on the 6th.”

Facebook relented on some issues, agreeing to make the news feeds opt-in.  However, the remaining problem is that many are not comfortable with the amount of information Facebook collects, not just that it’s no longer including it in your friends’ news feeds without permission.  Duncan Riley of Techcrunch claims that “advertisers will still be able to tap into Beacon for purchasing preferences and other details based on activity on Facebook so the privacy option is really only skin deep.”

Similarly, Erick Schonfeld writes, “Facebook has addressed most of the initial concerns by wisely forcing people to deliberately and repeatedly choose to participate. But there are still some serious issues with the way the whole system works technologically.  According to one security engineer’s analysis , Beacon partners transmit data to Facebook in bulk about members who visit their site. This is true even for those who opt out of Beacon by clicking on “No Thanks” when asked if the data can be shared with Facebook. The data is sent anyway. Facebook clarifies  that it does not do anything with this opted-out data, and in fact deletes it from its servers. But the deletion occurs on Facebook’s servers, not the advertisers’.”

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