Germany is stopping short of legal action against Facebook after reaching a 14-point agreement on Monday over how the site handles data from non-Facebook users.
Hamburg's Data Protection Authority took issue with Facebook last August over its Friend Finder feature, which imports e-mail addresses from user contact lists on other e-mail services and then sends out invitations to non-Facebook users to join the site.
But it wasn't necessarily clear to those recipients how their e-mail addresses were obtained, Johannes Caspar, who heads the agency, said on Tuesday. The DPA also questioned whether Facebook's retention of those e-mail addresses violated data protection regulations.
Under the agreement, Facebook will allow those non-Facebook users to opt-out of further invitations. Those targeted users will also be told why they have been sent an invitation and how Facebook is allowed to use their e-mail addresses for additional friend finding.
Caspar said it would be better to have those non-Facebook users opt-in before receiving notifications such as invitations at all, but further progress with Facebook on that issue was unlikely without legal action.
"I think we could go further in the way of legal punishments but I think we have come to an end with this agreement," Caspar said. "We think we have done a good job."
Pushing further would have meant that the German regulator might have to look into other privacy issues, such as non-Facebook users who are displayed in photos on the social networking site, he said.
"We have to accept that this what we could legally get so we think we won't go further," Caspar said.
Facebook relies on the invitation feature to draw new users into the rapidly growing service. Under other terms of the agreement, Facebook users who import e-mail addresses will be given clearer notification that those addresses could be used to send out invitations. But those users will also be able to shut the feature off if they wish, Caspar said.
Those users will also be reminded to only sent invitations to people whom they know personally and who would welcome such an invitation, Caspar said.
In a statement, Facebook said: "We are pleased that we have come to a solution with the Hamburg DPA regarding concerns about Friend Finder and look forward to continue our constructive discussions and dialogue in the future."