Can Facebook Take a Hint?

Facebook (NASDAQ:FB) has presented yet another change to its Statement of Rights and Responsibilities and its data-use policy that has privacy groups outraged. As Bloomberg reported on Monday, Marc Rotenberg, president of the Electronic Privacy Information Center, and Jeffrey Chester, president of the Center for Digital Democracy, have written a letter to the Social Network’s Chief Executive Mark Zuckerberg asking him to rescind the proposed modifications.

What is Wrong With Facebook’s Proposed Changes?

Last week, Facebook proposed to end voting options for users, shift controls on messaging, and combine data for affiliates, which according to Rotenberg and Chester’s letter would “raise privacy risks for users.” Previously, the company had allowed members to vote on changes if enough interest was shown regarding the issue.

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But Facebook said that the voting system was flawed. “We deeply value the feedback we receive from you during our comment period,” Elliot Schrage, vice president of communications, public policy, and marketing, wrote on his company blog on November 21. “However, we found that the voting mechanism, which is triggered by a specific number of comments, actually resulted in a system that incentivized the quantity of comments over their quality.”

Are Facebook Users Upset?

Despite the implications of the proposed changes, Facebook still wanted members’ feedback. Last week, the Social Network announced that it was asking for user comments on the proposal to take away members’ rights to vote on these kinds of changes. As CNN reported on Tuesday, if 7,000 comments are received by Wednesday “then Facebook, by its own rules, will hold a referendum on the topic.” So far, 12,000 comments have been received.

CHEAT SHEET Analysis: Does A-Level Management Run Facebook?

One of the core components of our CHEAT SHEET Investing Framework identifies whether a company has a CEO who has a firm positive or negative reputation. In this case, Zuckerberg has drawn the ire of privacy groups as he has on numerous occasions. In April, the company settled privacy charges with the U.S. Federal Trade Commission that accused Facebook of deceiving its users by forcing them to share more personal information then they intended. Under this settlement, the company is required to get user consent for certain privacy changes.

Privacy is an important issue for Facebook, as its ever evolving privacy policy affects how its customers perceive the company. A-Level Management knows how to curate such policies to find the balance users want. To some degree the Social Network has done just that; the proposed changes are still dependent on Facebook’s referendum.

However, under the current system 30 percent of users must vote to overturn the proposal, and based on recent history, it is highly unlikely that 300 million people will vote. In the most recent of Facebook’s two votes, held in June, only 342,632 people voted.

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