Facebook Tells FTC To Balance Privacy, Innovation

In October, the company blocked some third-party developers after they were found to be transmitting user data -- something expressly prohibited in Facebook's developer terms. After several rocky periods in 2010, Facebook began working with privacy advocacy groups such as the Center for Democracy and Technology to make sure it addressed privacy issues.

Facebook's responsiveness to its users and to lobbying initiatives underscore the effectiveness of these approaches, the company said.

"We are the only major online service provider that allows users to vote on the changes if comments reach a pre-set threshold," wrote Richter. "Time and again, Facebook has shown itself capable of correcting course in response to user feedback and thereby continuing to build trust."

These steps, rather than extensive government intervention, protect individuals, Facebook said. The FTC, the Department of Commerce, and other groups recommend a three-prong approach: Integrated privacy protection where companies incorporate context-sensitive privacy protections throughout their organizations and products; individual empowerment and responsibility, whereby people are equipped to make the right privacy decisions for themselves, and companies give them more transparency and meaningful choice regarding the context of data-collection; and industry accountability, in combination with FTC enforcement, that addresses users' concerns while also accommodating rapidly developing technologies and user expectations of privacy.

"Facebook agrees that these three principles should be central to any effort to understand privacy in today's interconnected environment," the letter said.

However, Facebook underscored the importance of ensuring that privacy protections benefit -- but not frustrate -- users, and that privacy protections do not damage innovation, wrote Richter.

"Hundreds of thousands of application developers have built businesses on Facebook Platform," according to the letter. "To take just one example, games developer Zynga, creator of the popular Farmville game, has more than 1,300 employees and has been valued at $5.8 billion. Thanks to these innovations, the digital economy remains a vital source of jobs, growth, and investment, even in these challenging times."