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days. If Facebo o k f ails to co mply with these terms, it will f ace f ines o f $ 16,000 per vio latio n per
day.L. Gannes, “Facebo o k Settles with the FTC f o r 20 Years o f P rivacy Audits,” AllThingsD,
No vember 29, 2011. K E Y TAK E AWAYS
Word of mouth is the most powerful method for promoting products and services, and Beacon
was conceived as a giant word‐of‐mouth machine with win‐win benefits for firms,
recommenders, recommendation recipients, and Facebook.
Beacon failed because it was an opt‐out system that was not thoroughly tested beforehand and
because user behavior, expectations, and system procedures were not completely taken into
Partners associated with the rapidly rolled out, poorly conceived, and untested effort were
embarrassed. Several faced legal action.
Facebook also reinforced negative perceptions regarding the firm’s attitudes toward users,
notifications, and their privacy. This attitude only served to focus a continued spotlight on the
firm’s efforts, and users became even less forgiving.
Activists and the media were merciless in criticiz ing the firm’s terms of service changes.
Facebook’s democratiz ing efforts demonstrate lessons other organiz ations can learn from,
regarding user scrutiny, public reaction, and stakeholder engagement.
A combination of firm policies, computeriz ed and human monitoring, aggressive reporting and
follow‐up, and engagement with authorities can reduce online predator risks. Firms that fail to
fully engage this threat put users and communities at risk and may experience irreparable damage to firms and reputations. QU E S TI ONS AND E XE RC I S E S
1. What was Beacon? Why was it initially thought to be a good idea? What were the benefits to
firm partners, recommenders, recommendation recipients, and Facebook? Who were Beacon’s
partners, and what did they seek to gain through the effort?
2. Describe “the biggest problem with Beacon”? Would you use Beacon? Why or why not?
3. How might Facebook and its partn...
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