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FTC, Facebook reportedly settling 2009 privacy complaint

Facebook agrees to opt-in practice for major privacy changes, as well as 20 years of privacy audits, according to The Wall Street Journal.

The Federal Trade Commission and Facebook are close to finalizing a settlement over a complaint about deceptive privacy practices on the social network from nearly two years ago.

The proposed settlement, which awaits final approval from FTC commissioners, would require Facebook to let users opt in to changes in the way their information is shared, rather than forcing them to "opt out" of changes Facebook imposes on them, The Wall Street Journal reported. Put formally, that would require Facebook to get "express affirmative consent" if it makes "material retroactive changes."

The agreement also calls for Facebook to undergo independent privacy audits for 20 years, the report said. When Google settled FTC charges in March related to privacy practices with its Buzz feature it also agreed to privacy audits.

When contacted by CNET this afternoon, spokespeople at the FTC and Facebook declined to comment.

The settlement reportedly relates to a complaint filed with the FTC by advocacy groups in December 2009 that claimed that changes Facebook made exposed more data to third-party apps and advertisers and violated user expectations. The changes made users' names, profile picture, city, and other information public to anyone on the Web by default, forcing users to go back in and reset their privacy choices. At the time, Facebook co-founder Mark Zuckerberg touted the changes as privacy enhancing.

Marc Rotenberg, executive director of the Electronic Privacy Information Center (EPIC), one of the groups that has complained to the FTC about Facebook, could not confirm the news, but said he was pleased by the prospect.

"It's been almost two years since a coalition of U.S. consumer and privacy groups first filed this complaint with the FTC concerning Facebook's changes to its users' privacy setting," he said in an e-mail. "It's nice to see there may finally be action by the Commission."

The company has been dogged over its privacy practices for years. In 2007 it launched its controversial Beacon advertising service, which prompted a class action lawsuit which was eventually settled. And in early 2009, the company rescinded changes that would have given it seemingly perpetual control over user content following a backlash.

Earlier this year, the Electronic Privacy Information Center, the ACLU and other groups asked the FTC to look into Facebook's automatic sharing feature. They allege that the "frictionless sharing" is a deceptive trade practice that violates federal law.

And just today Reps. Edward Markey (D-Mass.) and Joe Barton (R-Texas) expressed concern in a letter to Zuckerberg that a patent application Facebook filed earlier this year portends plans by the company to track users' activity on other Web sites after they have logged out. However, Facebook spokesman Andrew Noyes told the Hillicon Valley blog that: "Nothing could be further from the truth."

Updated 3:15 p.m. PT with news about the letter from the congressmen about the patent application.