Compliance Management, Network Security, Privacy, Threat Management

Privacy groups ask FTC to study new Facebook ad deal

Two privacy groups have called on the Federal Trade Commission to investigate Facebook's deal with marketing data company Datalogix.

On Thursday, the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD) wrote a joint letter to the FTC urging the agency to determine whether a “data-matching arrangement” violates the terms of Facebook's settlement agreement last year over privacy charges.

The Financial Times broke the news of the Facebook-Datalogix deal on Monday, reporting that the partnership would allow the social networking site to track whether ads seen on Facebook lead users to buy those products in stores – a highly attractive tidbit for advertisers using Facebook.   

According to the story, Westminster, Colo.-based Datalogix could track in-store purchases by matching email addresses in its database to email accounts used to set up Facebook profiles, and by using other account registration information. Datalogix buys consumer data from loyalty card programs used by more than 1,000 retailers. 

Facebook told the news outlet that the email addresses and other shared information will be made anonymous when used for advertising purposes.

“The emails and other identifying information are made anonymous and collected into groups of people who saw an ad and people who did not,” according to the Financial Times report. "Datalogix compiles a report for Facebook and its advertisers to measure which creative approaches and demographic targeting persuade people to buy specific products offline."

Jeff Chester, the executive director of CDD, who was named in the letter to the FTC, told on Friday that the data-sharing deal should concern Facebook users.

“Facebook over the last several months has expanded its relationship with an outside data company, creating an unlimited daisy chain of information on its users,” Chester said. “Facebook users had no idea of when the system was put in place, and more importantly, its consequences. Under the FTC settlement, Facebook is supposed to make their practices transparent. This is case number one of how they are not living up to that.”

In 2011, Facebook was directed to alter its privacy practices as part of an FTC settlement that aimed to rectify the company's deceptive sharing of users' information.

On Friday, a Facebook spokeswoman told in an email that the partnership with Datalogix is comparable to others it holds.

“We are working with Datalogix to help advertisers understand how well their Facebook ads are working,” she said. “We also do this through our partnerships with companies like Nielsen and comScore, and through our own advertising tool. We don't sell people's personal information, and individual user data is not shared between Facebook, Datalogix or advertisers.”

A Datalogix representative did not respond to a request for comment.

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