Terms and Conditions May Apply Page #3

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to use facebook properly.

Most relationships

in your life,

It's very good that the other

person doesn't know everything

You've ever said,

or scribbled, or thought.

When you choose to share

a photo album,

You go to facebook and you

choose to put those photos

there.

Just have an opt in on every

single thing.

Opt in--

Opt in--

Opt in.

I'm okay with facebook

behaving like a company.

But I think we need to

treat it like a company,

And not treat it like

some benign public utility.

[narrator] these are the default

settings on facebook in 2005,

Divided into 12 categories.

As time passes, more and more

information is shared by

default.

In 2009, facebook began

automatically sharing

personal information

With the entire internet.

By 2010, everything was shared

by default,

Except for your contact info

and your birthday.

We could, if you did

a search, and a gmail,

And a youtube and so forth

yesterday,

And you did it from your home--

I'll give you the worst case.

You did it from your home,

and you only have one

computer in your home.

In theory we could

cross-correlate those

And get all three together.

We don't do that and we're

not likely to do that.

[narrator]

but in January of 2012

Google made changes

to tir privacy policy,

And they did just that.

Google combined l

of the information

Any of the services had

collected about a person

And put them into

one ngle profile.

What eric schmidt had said

was the worst-case scenao,

Gole had actually done.

How can you honestly sit here

And tell this committee

this is not a growing problem?

A good deal of what

I was trying to say

Is that I don't think there's

evidence of market failure

Or consumer harm from

the legal and legitimate use

Of personal information

in commerce.

I don't think there's

evidence of it.

There are companies that you've

never heard of, like acxiom,

That claim to have about 1500

points of data on the average

american citizen,

Everything from, you know,

whether you're right-handed

or left-handed,

What kind of dog you have,

What your sort of

psychological outlook is,

And all of that can be

used to inform decisions

That businesses make

about us as well.

These are the types of companies

that a potential employer

Would go to to try and run a

background check on somebody

Before they hired them.

They're able to connect the fact

That you went to site a,

And then later to site b,

And then eventually to site c,

And create this detailed history

Of what sites you visit online.

[man] they don't put your name

in the cookie.

They put a unique

serial number in the cookie

That can then be linked

to your name in their database.

I don't know if you've

ever seen the picture

Of the ad network ecosystem

That shows all the parties

in the ad network ecosystem.

It's a bit overwhelming.

The information is valuable

to different people for

different reasons.

What if you buy

a lot of alcohol?

You know, they might want

to raise your premiums

Because they think you're

at risk for alcoholism

or something like that.

The company might use it

in a way that actually

harms you.

[narrator]

for example, in 2008,

Thousands of people suddenly

had their credit limits reduced,

Seemingly for no reason.

While on vacation, one wealthy

business owner from atlanta

Saw his limit plummet

from $10,800

To just $3,800,

ruining his vacation.

The letter he received

said this:

"other customers who

have used their card

At establishments

where you recently shopped

Have a poor repayment history

with american express."

This means companies

like wal-mart.

And in minneapolis,

a father came into a target

Outraged that they were sending

his teenaged daughter

pregnancy coupons,

Coupons that were

addressed to her.

The man thought that target

was trying to encourage

his daughter to get pregnant.

As it turned out, thanks

to her shopping habits,

Target knew that this

high-schooler was pregnant

before her own father did.

The father later apologized.

And in the netherlands,

data was being used to harm

customers in a whole new way.

Now, while you're

driving and using a gps,

That gps is sending back

signals to tell how fast

you're moving.

It's really useful

for helping us avoid traffic.

But that got a little company

called tomtom wondering

Who else might be interested

in knowing the speed of traffic.

And so in the netherlands,

the data that people

were willingly trading

To find a faster way home was

being sold to the authorities

To give those

same drivers tickets.

Is the reason we don't have any

baseline consumer privacy law

Because of the fbi? No.

That is largely due to

lobbying by companies

That have built extremely

lucrative businesses

Around these business activities

And don't want to do

anything to disrupt that.

Under facebook's terms

and conditions,

A user must be 13 or older.

Despite this, according to a

recent consumers' report study,

An estimated 7 1/2 million users

were younger than 13.

First of all, we don't allow

people to have accounts

under the age of 13.

And my reaction to that

is that's just absolutely

indefensible.

I mean, it's unbelievable

that you would say that.

Well, senator, I just want to

say we-- we really emphatically

agree with your points.

They say that facebook sent

an army of lawyers

So that the final privacy

legislation that emerged

In 2011 was watered down

significantly

In a way that wouldn't affect

facebook's business model.

My name is alan davidson,

and I am the director

of public policy

For google in north

and south america.

My message today is simple.

As we've heard, mobile services

create enormous social and

economic benefits.

I reject the notion

that privacy protection

Is the enemy of innovation.

It absolutely doesn't

have to be, and isn't.

[narrator]

it was an expensive

year of lobbying for

these big companies.

Google spent five times

as much as the year before,

And facebook spent

four times as much.

Senate bill 242 will protect

users of social networking

internet sites.

It will protect these users

from identity theft

And from unwanted contact

by keeping their private

information private,

Of course unless

they agree to share it.

I know that many members

including myself

Do not want to negatively impact

A very important industry

for the state of california.

Individuals involved

in this industry

Don't want to see

any regulation whatsoever,

So I think that's

really the key.

And one of the most

interesting things I've found

in these conversations

Is that many members

of the legislature

Don't even have

social network sites

Because they're concerned

about their privacy.

And at the time the bill was

being heard,

Although lobbyists were in the

committee room

For the entire hearing, they

did not come forward to speak.

So it was sort of an

interesting process,

Sort of a stealth killing

of the bill,

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