Why Facebook Will Start Serving Ads on Instagram Soon

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Source: Gigaom.com

When we think about data privacy, we normally think about a company giving or selling our info to a third party. But a single company can also circulate around our information among its various units in ways that raise similar privacy concerns

Most of the media coverage of Facebook’s latest proposed revisions to its legal agreements with users has focused on one change: the proposed elimination of users’ right to vote. The reality, however, is that this change probably won’t have any practical effect because a vote by users would almost certainly never have been binding on Facebook anyway.

Another change the company has made, despite being more significant, has received relatively little attention. It will add a clause that says it can now share your information with its affiliates. This underscores an important trend: Facebook is now one of several companies that shares your information among its various different services. As the range of services offered by consumer internet heavyweights like Facebook and Google continues to expand, this means that your personal data will end up being used by in ways you could never predict.

The trend towards internal data sharing

  • Google’s unified terms of service (introduced on March 1) allows it to combine your data across products like Gmail, Google+ and Google Docs, as well as YouTube, Picasa and scores of other Google properties.
  • Microsoft updated its services agreement effective Oct. 19 to allow it to use your content to “provide, protect and improve” all “Microsoft products and services.” The agreement had previously allowed the company to use your data only to provide the particular service in question.
  • eBay and PayPal can share your data among all “members of the eBay Inc. corporate family,” which also includes Shopping.com.

Facebook’s ability to use customer data benefits users by allowing for innovation. Its existing Data Use Policy says that you allow the company develop “innovative features and services” by using “the information we receive about you in new ways.” But when its proposed revisions go into effect later this month, its ability to share users’ data will increase further. The following new paragraph will be added:

We may share information we receive with businesses that are legally part of the same group of companies that Facebook is part of, or that become part of that group (often these companies are called affiliates). Likewise, our affiliates may share information with us as well. We and our affiliates may use shared information to help provide, understand, and improve our services and their own services.

The Facebook affiliate that first comes to mind is Instagram. And one of the most immediate applications of this new provision could be that Facebook starts to serve ads on Instagram. But Instagram is just one of many Facebook affiliates. It has numerous subsidiaries, including one it created earlier this year to handle its payments business. And its publicly stated expansion plans mean that it will likely be acquiring other companies, forming new business units, and entering new markets in the near future.

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