California's Proposed Online Privacy Act Faces Stiff Opposition

Facebook, Twitter, Google and others are worried about a proposed California law that would impose new privacy regulations on social networks, stop personal data from being displayed without your consent, and give new powers to parents over their kids' profiles. If social networks failed to live up to any of the bill's requirements, the companies would face a fine of up to $10,000 for each violation.

Needless to say, social networking companies that stand to be affected are not happy with the proposed legislation, dubbed the Social Networking Privacy Act. A coalition of 17 companies and trade groups that includes eHarmony, Facebook, Google, the Internet Alliance, Match.com, Skype, Twitter, Yahoo and Zynga have sent a letter to the bill's sponsor, State Senator Ellen Corbett, voicing their concerns over the new bill, according to All Things D.

The companies argue that to comply with California's proposed law, they would have to impose these regulations on all users worldwide. It would be impossible, the companies argue, to know for sure who is and who is not a California resident. The new law could also stifle innovation causing "significant damage to California's vibrant Internet commerce industry at a time when the state can least afford it," the companies say.

Breaking down the bill

Are the service providers right? Is California about to ruin social networking online forever? Let's take a look at key components of the new bill as it stand right now, and what the industry has to say about it.

Locked down by default

What the bill says: "(a) A social networking Internet website shall establish a default privacy setting for registered users of the site that prohibits the display, to the public or other registered users, of any information about a registered user, other than the user's name and city of residence, without the agreement of the user...(d) [these] provisions shall only apply to a text field specifically designated to display the registered user's home address or telephone number."

Translation: Social networks by default cannot display your home address or telephone number without your consent. Although the language does suggest this regulation could be interpreted as applying to almost all your profile data.

What the industry says: "By hiding from view of all existing users' information until they made a contrary choice," the State of California would be significantly limiting those users ability to "freely speak, write and publish his or her sentiments on all subjects."

Reality check: The industry's argument sounds like complete nonsense to me. You can still open up your profile information to others with just a few clicks in your privacy settings. Besides, it appears this regulation only applies to your home address and telephone number, although the wording of the bill is confusing.

Privacy settings first

What the bill says: "A social networking Internet website shall establish a process for new users to set their privacy settings as part of the registration process that explains privacy options in plain language ... privacy settings [must be] available to all users ... in a conspicuous place and an easy-to-use format."

Translation: New users have to configure their privacy settings before they can use the site, and privacy settings have to be simplified for all users.

What the industry says: "[The bill would] force users to make decisions about privacy and visibility of all of their information well before they have ever used the service. ... A description of all availability [sic] privacy and visibility options to a consumer who has never used the service in question could take thousands of words and up to half an hour to read."

Reality check: Making privacy settings simpler would be a great thing, especially for Facebook users. But the industry makes an interesting point. How do you know how private you want a service to be if you've never used it and don't know what it will be like? Twitter, for example, works best as a completely public network, while Facebook is designed to share information with your friends. Perhaps a better solution would be to require users to go through a privacy settings wizard within the first week they use a new service. That said, I doubt it would take "thousands of words and up to a half-hour to read" to explain privacy settings to a new user.