Consumers Union called on Facebook Chief Executive Mark Zuckerberg to do more to keep underage users off the site after a recent survey showed that as many as 7.5 million children under the age of  13 had accounts on the social network.

The nonprofit publisher of Consumer Reports, which conducted the survey, also said that company needed to be "more diligent and effective" in protecting the privacy of the estimated 20 million people less than 18 years old who actively used Facebook over the past year.

"We urge Facebook to strengthen its efforts to identify and terminate the accounts of users under 13 years of age, and also to implement more effective age verification methods for users signing up for new accounts," Ioana Rusu, the regulatory counsel for Consumers Union, wrote in a letter Friday to Zuckerberg.

"Facebook should also be more transparent about its current strategies to prevent preteens from accessing the site, as well as its efforts to seek out and terminate underage user accounts," she said.

The letter follows tough questioning of a Facebook executive Thursday at a congressional hearing over the issue of underage users.  Senate Commerce Committee Chairman John D. Rockefeller (D-W.Va.) said it was "indefensible" that Facebook had only 100 employees monitoring the activities of its 600 million users.

Lawmakers and regulators are considering new online privacy regulations, particularly for children.

Facebook's policy is not to allow anyone under 13 to open an account, which allows the company to avoid federal regulations covering children online. At the hearing, Facebook Chief Technology Officer Bret Taylor said Facebook shuts down the accounts of people found to be lying about their age to avoid the company's restriction.

But Taylor admitted that Facebook depended on other users to report underage users. Facebook did not have immediate comment on the letter.

Consumers Union said the privacy problems go beyond preteens. A phone survey it conducted in May found that 73% of respondents supported tougher protections for teens' online data.

The group said that it believes many minors don't understand the implications of all the information they are sharing on Facebook. A recent example took place in New Hampshire, where a 13-year-old middle school student was suspended for a Facebook post in which she wished Osama bin Laden had killed her math teacher.

Consumers Union said Facebook's default privacy setting for minors should be to share information with "friends only" instead of "friends of friends" -- a category that publicizes the average users information to 16,900 people.

The group also called for Facebook to create an "eraser button" that would allow users to delete all potentially embarrassing information posted about them on the site when they were minors.

"This would help ensure that adult Facebook users will not be perpetually haunted by pictures and posts on the site added while they were still minors," Rusu wrote. "In law enforcement, juvenile records are expunged at the age of 18. Facebook should have a similar policy, allowing users to completely erase all personally identifying information posted to the site while the individual is a minor."

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-- Jim Puzzanghera

Photo: Mark Zuckerberg, co-founder and CEO of Facebook, at a town hall event at Facebook headquarters in Palo Alto on April 20, 2011, which featured President Barack Obama.Credit: David Paul Morris/Bloomberg

A top Facebook executive told senators considering new online privacy protections that the company fears that placing tougher limits on the use of consumer data could squelch its network and the rest of the "social Web" because it would inhibit the sharing of information.

"Facebook is fundamentally about sharing, and adopting overly restrictive policies will prevent our social features from functioning in the way that individuals expect and demand," Bret Taylor, Facebook's chief technology officer, said in written testimony before the Senate's consumer protection subcommittee.

"Thus, to satisfy people’s expectations, we not only need to innovate to create new protections for individuals’ information," he said. "We also need to innovate to ensure that new protections do
not interfere with people’s freedom to share and connect."

Taylor said Facebook has "robust privacy protections" and considers those protections when developing new services, a practice known as "privacy by design." But he cautioned that in an era when many people want to share their pictures and other information to get the most out of social networks, Facebook doesn't want to assume that everyone wants a vault around their data.

"Of course, privacy by design does not mean privacy by default," Taylor said. "As services evolve, so do people’s expectations of privacy. At Facebook, we believe that providing substantive privacy protections means building a service that allows individuals to control their own social experiences and to decide whether and how they want to share information."

Taylor testified at the subcommittee's hearing titled Consumer Privacy and Protection in the Mobile Marketplace. The hearing comes as lawmakers are considering whether there should be new laws specifically governing location data sent from smart phones and other mobile devices.

The Federal Trade Commission and the Federal Communications Commission are also looking into new ways to protect online privacy.

The issue of mobile privacy has heated up after security researchers said last month that they found an obscure file in the software on Apple iPhones and iPads that could store thousands of detailed records of a user's whereabouts. Google also said it collects such location data from mobile devices using its Android software.

Executives from Apple and Google, testifying at a hearing last week by another Senate subcommittee, said they collected the information anonymously and shared it with third-party applications only if the user agreed to it.

Apple and Google executives also are scheduled to testify at Thursday's hearing.

Sen. John F. Kerry (D-Mass.), who has introduced bipartisan legislation to prevent the misuse of sensitive consumer information, said that privacy protection is not "the enemy of innovation."

"In fact, a more trusted information economy, I believe, will encourage greater consumer participation … in that marketplace," he said. "Companies collecting people's information, whether you're a tech titan or not, ought to comply with a basic code of conduct."

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FCC steps into privacy debate over location-based data, announcing forum

iPhone and iPad can track a user's location history

-- Jim Puzzanghera

Photo: Facebook headquarters in Palo Alto.Credit: Paul Sakuma/AP Photo

The Federal Communications Commission is stepping into the simmering privacy debate over location data collected through cellphones and mobile devices, announcing a forum next month on the issue that could lead to rules governing the coveted information.

The FCC has authority over cellphone towers, which Apple Inc. and Google Inc. said they use to help pinpoint the exact locations of users.  Such data are valuable to retailers and advertisers to pitch services and deals near a customer at any given moment.

In recent months, an internal FCC working group has been examining the privacy implications of the increasing use of location-based services, the agency said.

The FCC said Tuesday it had invited Apple, Google and other technology companies, along with wireless providers, consumer groups and academic experts, to participate in a public education forum in Washington on June 28. Among the topics: how location-based services work, their benefits and risks, and information parents should know about location tracking of children who use mobile devices.

The meeting will help agency staff develop a report on location-based services that could recommend rules for FCC Chairman Julius Genachowski and other commissioners to consider.

The FCC said it also has begun accepting comments from the public on the issue.

"Over the last few years, [location-based services] have become an important part of the mobile market and a boon to the economy," the FCC said Tuesday. "Commercial location-based services include applications that help consumers find the lowest-priced product nearby or the nearest restaurant.... But recent reports have raised concerns about the location-based information that is gathered when consumers use mobile devices."

Security researchers said last month that they discovered a file in the software on Apple iPhones and iPads that could store thousands of detailed records of a user's whereabouts. Google also said it collects such location data from mobile devices using its Android software.

Executives from the two companies testified at a Senate hearing last week, saying they collected the data anonymously and shared them with third-party applications only if the user agreed to it. Apple and Google executives are scheduled to testify at another hearing on the issue Thursday, along with an executive from Facebook.

Lawmakers are considering whether there should be specific laws governing location data. The FCC and the Federal Trade Commission last year set up a joint task force to look into coordinated ways to protect online privacy. The FTC will co-host the June forum.

An FTC official said last week that location data deserve "special protection." But it is not recommending specific legislation yet, preferring to push companies to protect the information better.

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-- Jim Puzzanghera

Photo: FCC Chairman Julius Genachowski addressing a wireless industry conference last month. Credit: Reuters

Skeptical lawmakers on Wednesday interrogated the chief executives of AT&T Inc. and T-Mobile USA about their proposed merger, raising concerns that the $39-billion deal would increase prices for wireless consumers by creating a market dominated by two huge players.

“The more providers of cellphone service, the lower the price, the better the quality of service and the more innovation that results,” said Sen. Herb Kohl (D-Wis.), chairman of the Senate's antitrust subcommittee.

“So the burden will squarely be on AT&T and T-Mobile to convince us why this merger is desirable, how it will benefit consumers, and to put aside our concerns that it may very well harm competition.”

The deal, announced in March, would combine AT&T, the nation’s second-largest wireless provider, with No. 4 T-Mobile. The new behemoth would vault ahead of Verizon Wireless to become the nation's largest carrier. AT&T and Verizon would control nearly 80% of the market, with Sprint in a distant third.

The Justice Department and Federal Communications Commission are reviewing the deal to determine if it will harm wireless competition and is in the public interest. 

Analysts have said the deal faces tough hurdles to approval from the Obama administration, which has vowed to be tougher on antitrust issues.

AT&T Chief Executive Randall Stephenson and T-Mobile CEO Philipp Humm told the subcommittee that the deal would benefit consumers by merging two companies with complementary technology, allowing it to deliver next-generation wireless service to more customers than it could separately as available airwaves become scarce.

They said the improved and expanded service made possible by the merger would continue the wireless innovation that has driven prices down and would help expand high-speed wireless Internet access, a major goal of the Obama administration.

“It’s a very basic concept that in any industry, greater capacity is a fundamental driver of competition,” Stephenson said. “Over the last decade, U.S. wireless prices have steadily come down and this transaction will allow that to continue.”

Congress has no vote on the deal, but opposition from lawmakers can influence regulators. Kohl has vowed to look closely at the deal. And the title of the hearing raised the question of a potential emerging wireless monopoly similar to the one AT&T had decades ago in the traditional land-line world --  “The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?"

Sprint CEO Dan Hesse warned that the deal would lead to a duopoly that would increase prices.
“AT&T’s acquisition of T-Mobile will turn back the clock on wireless competition,” he told the subcommittee. “It will … put Ma Bell back together again.”

In that environment, Sprint would be a likely takeover target. That would leave the nation with only two nationwide carriers, which would have huge clout to sign more exclusive deals on innovative devices as AT&T has had with the iPhone, and hobbling small, regional wireless companies as well, Hesse said.

Kohl said that having fewer national wireless providers would be alarming.

“If we go from four to three and then from three to two, that’s pretty serious,”  he said.
Kohl’s concerns have been echoed by public interest groups.

“Sprint will have just 16% and will instantly become a takeover target,” Gigi Sohn, president of digital rights group Public Knowledge, told the subcommittee. “We should not go back to the future … back to duopoly.”

Victor H. "Hu" Meena, chief executive of Cellular South Inc., a wireless provider in Mississippi, said the deal would cause small carriers like his to either “be acquired or bled dry” by AT&T and Verizon because the smaller providers would be unable to compete with the giants' market clout.

“We can find nothing good about it,” he said of the deal. “It’s bad for consumers. It’s bad for jobs. It’s bad for competition.”

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) said he was skeptical about AT&T’s promises that the deal would lead to more service in rural states such as his. The Judiciary Committee will push regulators to perform an “exhaustive and careful analysis.”

“I expect the Justice Department is leery of creating a market where other companies have to merge in order to survive,” Leahy said.

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Photo: AT&T CEO Randall Stephenson, left, and T-Mobile USA CEO Philipp Humm are sworn in before testifying before the Senate's antitrust subcommittee. Credit: Getty Images

The push for new laws to protect online privacy -- particularly the ability of websites to track people's movements across the Internet -- gained momentum Friday as key lawmakers said they would propose new legislation.

Senate Commerce Committee Chairman John D. Rockefeller IV (D-W. Va.) said he would introduce a bill creating a legal obligation for online companies to honor consumer requests not to track their online activities. And Reps. Joe L. Barton (R-Texas) and Edward J. Markey (D-Mass.) circulated draft legislation to protect the privacy of children online.

"For millions of kids today, the Internet is their new 21st century playground -– they learn, play and connect with others every day," said Markey, who along with Barton chairs the Bipartisan Congressional Privacy Caucus. "But kids growing up in this online environment also need protection from the dangers that can lurk in cyberspace. Unfortunately, 'Where the Wild Things Are' can apply to the 21st century Internet and the beloved children's book."

Markey and Barton want to update the Childrens Online Privacy Protection Act of 1998. Their proposed Do Not Track Kids Act would require online companies to get parental consent to collect personal information from children younger than 13. Online companies would be prohibited from using personal information from children and teenagers for targeted advertisements and other marketing.

The bill would create a "Digital Marketing Bill of Rights for Teens" to limit the collection of personal information, including geo-location data from mobile devices. And online companies would have to create an "eraser button" to permit parents or children to erase personal information.

Rockefeller's legislation would apply to all consumers, trying to build off the popularity of the "do not call" list for telemarketers. Companies would have to honor "do not track" requests.

"Consumers have a right to know when and how their personal and sensitive information is being used online -- and most importantly, to be able to say 'no thanks' when companies seek to gather that information without their approval," Rockefeller said. "This bill will offer a simple, straightforward way for people to stop companies from tracking their every move on the Internet."

His bill follows legislation introduced in February by Rep. Jackie Speier (D-Hillsborough) that would give the Federal Trade Commission the power to create regulations forcing online marketers to respect consumer requests not to be tracked. Similar legislation is moving through the California Senate that would give the state attorney general authority to enforce do-not-track requests.

Online privacy has become a hot issue in Washington after the FTC called for a "do not track" option for consumers as part of an online privacy report in December. And some Web browsers, including Microsoft's Internet Explorer and Mozilla's Firefox, recently have added a "do not track" feature, although there is no legal requirement that online companies honor it. 

The Obama administration has called for online privacy legislation. And Sens. John F. Kerry (D-Mass.) and John McCain (R-Ariz.) introduced a sweeping bill last month. Their proposed Commercial Privacy Bill of Rights would help prevent the misuse of sensitive consumer information, but would stop short of the "do not track" provision sought by privacy advocates.

The bills announced Friday give new impetus to allowing consumers to request they not be tracked, said John Simpson of Consumer Watchdog.

"Demand for 'do not track' protection is swelling, and that makes sense," he said. "This is an idea whose time has come, and I believe people will finally get the protection they are demanding."

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-- Jim Puzzanghera

Photo: Sen. John D. Rockefeller IV (D-W.Va.). Credit: Getty Images

A coalition of leading privacy groups urged the public to push for industrywide adoption of the tough online data protection terms the government imposed on Google as part of a recent settlement of complaints about its Buzz social network.

Google agreed to new measures to protect consumer data that include adopting a sweeping privacy policy and submitting to independent audits for the next 20 years to ensure that the company is following the rules. It was the first time the Federal Trade Commission required a company to enact a broad privacy policy.

The agency said it hoped other Internet companies would adopt the new standards. And on Thursday privacy advocates urged people to lobby for that as part of the agency's public comment period, which ends May 2.

"Even though public comments are about Google’s practices, they’re going to be sending a much larger message to all online companies about honoring their privacy policies," said Beth Givens, director of the Privacy Rights Clearinghouse.

Privacy groups have launched an effort called Fix Google Privacy to put pressure on the Internet search giant to improve its practices for handling consumer information. Among the changes they want is for Google to delete user search histories and to endorse a do-not-track requirement for Web browsers so that people could prevent their online activities from being followed by advertisers and other companies.

"I think Google is thinking it can get away with doing the bare minimum," to comply with the settlement, said Jeff Chester, executive director of the Center for Digital Democracy. "That’s why this public comment period is so important. We’re not going to let Google off easy here."

Google triggered "a huge wave of privacy concern" when it launched its Buzz social network last year, said Marc Rotenberg, president of the Electronic Privacy Information Center. Google promoted Buzz to its Gmail users, and many of them unwittingly agreed to make public their email contacts when they signed up. Others thought they had chosen not to join, only to find out that they had.

EPIC filed a complaint with the FTC, leading to what privacy experts have hailed as a landmark settlement with Google that will put pressure on other online companies to follow suit. Google has admitted problems with the launch of Buzz, saying it "fell short of our usual standards for transparency and user control."

The public comment period is an opportunity for the public to push for detailed requirements in the settlement to ensure it protects consumer privacy, Rotenberg said. It's also a rare chance for people to "make it clear how important privacy is to them and demand it be protected," said John Simpson, director of the Privacy Project at Consumer Watchdog, an advocacy group.

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-- Jim Puzzanghera

Two leading U.S. senators introduced bipartisan privacy legislation Tuesday to safeguard consumer information online, aiming to prevent the misuse of personal data while not squelching the advertising that fuels the Internet economy.

Sens. John Kerry (D-Mass.) and John McCain (R-Ariz.), who both have a history of working on technology issues, said their Commercial Privacy Bill of Rights would protect Americans' personal information as it is increasingly shared between online companies.

"Right now there is no law protecting the information that we share. Companies can harvest our personal information online and keep it for as long as they like it," Kerry told reporters in Washington. "They can sell it without asking permission, or even letting you know that they're selling your own information. You shouldn't have to be a computer genius in order to be able to opt out of information sharing."

The bill would give consumers certain rights concerning their online data, and require companies to take steps to protect the data and obtain permission to share it.

Companies that collect consumer data would have to provide clear notice on their practices.

Those would include requiring consumers to provide clear consent -- known as opt-in -- for the collection of "sensitive, personally identifiable information." Companies also would have to allow consumers either to access and correct their information or request that the information not be used or distributed.

The legislation would allow the Federal Trade Commission to approve so-called "safe-harbor" programs -- voluntary efforts that companies could design and establish on their own to comply with the legislation.

The bill also would require state attorneys general to back off on enforcing the legislation when the FTC steps in to take action against a violator. And Kerry and McCain would prohibit private lawsuits based on the law.

The senators said they were trying to strike the right balance.

"Our bill seeks to respect the ability of businesses to advertise and market and recruit new customers while also respecting consumers'[ personal information," McCain said, noting that many consumers enjoy receiving targeted advertisements and visiting websites that are free because they are supported by ads. "But consumers must have control over how their data is used when it is transferred to an unknown third party."

Kerry and McCain said that Microsoft Corp., Intel Corp. and EBay supported the bill, as did some consumer groups. The Obama administration has called for Congress to pass comprehensive online privacy legislation.

Noticeably missing from the bill is a requirement for a do-not-track mechanism in Web browsers, similar to the do-not-call list for telemarketers, that would give consumers the ability to stop companies from tracking their online movements. Kerry and McCain said they anticipated that other senators might try to add such a requirement, but they felt the opt-in requirements on companies were sufficient to protect consumer information.

In a letter to the senators, five consumer groups said they welcomed the new legislation, one of several privacy bills introduced or expected this year. But they said the Kerry/McCain legislation was "insufficient" to protect consumers and needed to be strengthened.

"We strongly believe that any privacy bill should direct the Federal Trade Commission to
require and enforce a 'Do Not Track Me' mechanism," said the letter from Consumer Watchdog, the Center for Digital Democracy, Consumer Action, Privacy Rights Clearinghouse and Privacy Times. "Consumers should have the right to use the Internet and mobile devices with confidence that their privacy choices are respected, and with anonymity if they choose."

-- Jim Puzzanghera in Washington

Photo: Sens. John Kerry, left, and John McCain discuss their online privacy legislation. Credit: European Pressphoto Agency

Microsoft Corp. said it was filing a formal antitrust complaint in Europe against Google Inc., alleging the Internet giant is squelching competition by limiting access to some of its data from YouTube and other services.

The complaint will be filed as part of the European Commission's ongoing antitrust investigation, launched in November, into whether Google has abused its dominance in Internet search there at the expense of rivals.

Microsoft said it was the first time it had ever filed an antitrust complaint against a rival, another salvo in a bitter, long-running battle between the two technology titans.

"Google has done much to advance its laudable mission to 'organize the world’s information,' but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative," Microsoft General Counsel Brad Smith wrote in a blog post. "We’ve therefore decided to join a large and growing number of companies registering their concerns about the European search market."

He said European regulators have found that Google has about 95% of the search market there and has taken advantage of that dominance "to the detriment of European consumers."

Google has restricted the ability of Microsoft's Bing and other rival search engines to gather data from YouTube needed to properly display search results, Smith said. Google also has blocked smartphones running Microsoft's Windows software from operating properly with YouTube -- problems that iPhones and phones with Google's Android software do not have, he said.

"Microsoft is ready to release a high-quality YouTube app for Windows Phone," Smith said. "We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide."

Smith cited four other examples of what he said was Google abusing its European search dominance, including limiting the ability of advertisers to access the data they give to Google so that they can also serve ads through competitors.

Google did not immediately respond to a request for comment.

[Updated at 7:53 a.m.: Google issued the following statement in response to the complaint: "We're not surprised that Microsoft has done this, since one of their subsidiaries was one of the original complainants. For our part, we continue to discuss the case with the European Commission and we're happy to explain to anyone how our business works."]

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-- Jim Puzzanghera

Photo: Reuters

Google Inc., has agreed to implement a comprehensive privacy policy and undergo 20 years of independent audits as part of a settlement with the Federal Trade Commission in connection with charges that it used deceptive tactics and violated promises to customers when launching its Buzz social network last year.

The terms of the settlement, announced Wednesday, were among the toughest ever handed out by federal regulators in a privacy case. It was the first time the FTC has required a company to put in place a sweeping privacy policy to protect consumer data, the agency said.

"When companies make privacy pledges, they need to honor them," said FTC Chairman Jon Leibowitz. "This is a tough settlement that ensures that Google will honor its commitments to consumers and build strong privacy protections into all of its operations."

Google will be required to give users "a clear and prominent notice and to obtain express affirmative consent prior to sharing the Google user's information with any third party in connection with a change, addition or enhancement to any product or service," according to the settlement. Google also will have to undergo a third-party review every two years for the next 20 years that certifies its privacy policy adheres to standards set in the settlement.

Google admitted Wednesday in a blog post that "we don't always get everything right," and apologized again "for the mistakes we made with Buzz."

"The launch of Google Buzz fell short of our usual standards for transparency and user control -- letting our users and Google down," Alma Whitten, the company's director of privacy, product and engineering, wrote in the post. "While we worked quickly to make improvements, regulators -- including the U.S. Federal Trade Commission -- unsurprisingly wanted more detail about what went wrong and how we could prevent it from happening again. Today, we've reached an agreement with the FTC to address their concerns."

Google launched the Buzz social network in early 2010 inside millions of accounts in its Gmail email service in hopes of developing a competitor to Facebook. But it quickly sparked an uproar as Gmail users worried that their contacts and other information would be exposed.

The FTC found that the options for opting out of Buzz were "ineffective" and that Google had "misrepresented" to consumers that they could opt out of the service. Gmail users who chose the "Nah, go to my inbox" option when they got a message about the new service "were nonetheless enrolled in certain features," the FTC said.

Google changed the service in response to thousands of customer complaints and apologized for the problems, but that didn't satisfy privacy advocates, who said the damage was already done. The Electronic Privacy Information Center filed a formal complaint with the FTC. The group called Wednesday's settlement "the most significant privacy decision by the commission to date."

"The FTC has sent a powerful message to Google and the online data collection giants: We are watching you as you watch consumers," said Jeff Chester, executive director of the Center for Digital Democracy, another privacy advocacy group.  "The commission's requirement that an independent outside privacy auditor is needed for Google for the next 20 years demonstrates what consumer advocates have been saying -- that Google and other online marketing companies are not being candid about their digital ad practices."

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Sprint Nextel Corp. formally announced its opposition to AT&T Inc.'s proposed $39-billion purchase of T-Mobile USA Inc., urging regulators to block the huge telecommunications deal.

If the deal goes through, Sprint, the nation's fourth-largest wireless carrier, would find itself a distant third, behind Verizon Wireless and a much larger AT&T.

Sprint had been a rumored suitor for T-Mobile. With the AT&T deal, however, analysts speculate that Sprint would be ripe for takeover or be forced to acquire smaller wireless providers to try to remain competitive.

But AT&T's purchase must be approved by federal regulators for it to go through. And Sprint said Monday that should not happen.

"Sprint urges the United States government to block this anti-competitive acquisition," said Vonya McCann, the company's senior vice president for government affairs. "This transaction will harm consumers and harm competition at a time when this country can least afford it."

Regulators are expected to give the deal tough scrutiny. And key lawmakers have promised hearings; some of them, along with consumer advocates, have raised concerns that the deal could raise prices for wireless subscribers and reduce competition.

Sprint argued that it can compete "in a truly dynamic marketplace" but that AT&T's purchase would reverse years of actions by the federal government and the courts to make the U.S. telecommunications market more competitive.

Raising the specter of a return to AT&T's one-time dominance of the traditional land-line phone business, McCann said, "Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly."

[Updated at 1:03 p.m.: AT&T responded that if it buys T-Mobile, the wireless market will remain competitive and the company will improve its quality of service and its customers' ability to get next-generation service, "spurring innovation and economic growth."

"The U.S. wireless market is intensely competitive, with five or more competitors in 18 of the top 20 markets," AT&T said.]

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 -- Jim Puzzanghera

 Photo: A Kyocera Corp. Echo smart phone that uses Sprint's service. Credit: Bloomberg