Facebook alters ad project after protest

SAN FRANCISCO – Seeking to keep the peace in its popular online hangout, Facebook Inc. has overhauled a new advertising system that sparked privacy complaints by turning its users into marketing tools for other companies.

Under the changes outlined late Thursday, Facebook’s 55 million users will be given greater control over whether they want to participate in a 3-week-old program that circulates potentially sensitive information about their online purchases and other activities.

Facebook provided two different opportunities to block the details from being shared, but many users said they never saw the “opt-out” notices before they disappeared from the screen.

With the reforms, Facebook promised its users will now have to give their explicit consent, or “opt-in,” before any information is passed along.

The concessions were made after more than 50,000 Facebook users signed an online petition blasting the system, called “Beacon,” as a galling intrusion that put the Palo Alto-based startup’s pursuit of profit ahead of its members’ privacy interests.

More than 40 Web sites, including Fandango.com, Overstock.com and Blockbuster.com, had embedded Beacon in their pages to track transactions made by Facebook users.

Unless instructed otherwise, the participating sites alerted Facebook, which then notified a user’s friends within the social network about items that had been bought or products that had been reviewed.

Facebook thought the marketing feeds would help users keep their friends better informed about their interests while also serving as “trusted referrals” that would help drive more sales to the sites using the Beacon system.

But thousands of Facebook users viewed the Beacon referrals as a betrayal of trust. Critics blasted the advertising tool as an unwelcome nuisance with flimsy privacy protections that had already exasperated and embarrassed some users.

Some users have already complained about inadvertently finding out about gifts bought for them for Christmas and Hanukkah after Beacon shared information from Overstock.com.