Facebook

Facebook faces a crackdown on selling users' secrets to advertisers

Facebook is facing a crackdown on how it exploits vast amounts of its users' most personal information to create bespoke advertising.

Facebook's Mark Zuckerberg must address privacy concerns or face fines under a new EC Directive Photo: GETTY

By Jason Lewis, Investigations Editor

9:00PM GMT 26 Nov 2011

The European Commission is planning to stop the way the website "eavesdrops" on its users to gather information about their political opinions, sexuality, religious beliefs – and even their whereabouts.

Using sophisticated software, the firm harvests information from people's activities on the social networking site – whatever their individual privacy settings – and make it available to advertisers.

However, following concerns over the privacy implications of the practice, a new EC Directive, to be introduced in January, will ban such targeted advertising unless users specifically allow it.

Even though most of the information it harvests is stored on computers in the USA, if Facebook fails to comply with the new legislation it could face legal action or a massive fine.

The move threatens to damage Facebook's plans to float on the Wall Street stock exchange next year, by undermining the way it makes money.

Viviane Reding, the vice president of European Commission, said the Directive would amend current European data protection laws in the light of technological advances and ensure consistency in how offending firms are dealt with across the EU.

"I call on service providers – especially social media sites – to be more transparent about how they operate. Users must know what data is collected and further processed (and) for what purposes.

"Consumers in Europe should see their data strongly protected, regardless of the EU country they live in and regardless of the country in which companies which process their personal data are established."

The move comes as a Sunday Telegraph investigation highlights the extent to which Facebook can help companies to focus adverts according to the profiles of users.

The information analysed and stored by the company is not limited to users' personal details, and "likes" that they input on their "walls".

The firm also gathers details about their friends, family and educational background and detects subtle changes to their lifestyle, enabling it, for example, to target a bride-to-be with advertising for wedding photographers.

Other commercially valuable information, such as what music people are listening to via the site, is also available to advertisers.

Everything people share with their friends on Facebook is being tracked by the firm, retained, and can be used for commercial purposes.

It can even harvest information by performing keyword searches on behalf of advertisers. In this way, it can find out, for instance, details about people's political beliefs or their sexual preferences.

Facebook stores messages and "chats" sent via the site and keeps them on its database even after they are deleted by those involved in the private online conversations.

The company says it does not use this informatin for advertising.

The sheer volume of personal data accumulated by the company was hinted at earlier this year when a 24-year-old Austrian student, Max Schrems, asked it what information it held on him.

The request led to the site sending him a CD containing 1,222 pages of data. He complained to data watchdogs because the disclosures were incomplete and made clear the social networking site retained further information about him which it had not handed over.

Next week, the EU's data protection working party, which includes the UK Information Commissioner, will meet to discuss the "state of play" regarding Facebook.

They will discuss an audit of the company's working practices being conducted by the data protection watchdog in Ireland, where Facebook has its international headquarters.

The working group has warned internet firms over the use of behavioural advertising techniques which enable them "to track individuals ... to serve tailored advertising."

A report from the group says in most cases, "individuals are simply unaware that this is happening" and adds that the authors were "deeply concerned about the privacy and data protection implications of this increasingly widespread practice."

All Facebook's 800 million users, whether they realise it or not, agree to let the company use of their personal information.

When signing up, they approve a 4,000 word contract, which licenses Facebook to use their data as it sees fit. This contract can be viewed by clicking on a link in the small print at the foot of each page on the site.

Unlike other traditional media outlets, including newspapers, the website makes no distinction between information obtained for commercial purposes and details gathered in the course of its other activities, as people share content and talk online with their friends.

In the past, Facebook was largely funded through a banner advertising contract with Microsoft. But the gradual increase in advertising on the site, which started in 2009, is intended to make Facebook self-sufficient and ready for a stock market flotation.

In Britain, the gradual introduction of more targeted advertising has earned it £25 million in the last two years but this figure is expected to increase dramatically as it prepares to float its shares on Wall Street.

A spokesman for the UK Information Commissioner said: "Facebook should ensure that any data it collects should be used in the manner that its users expect.

"If personal data is being passed on to a third party or used for targeted advertising then this should be made clear to the user when they sign up to the site and reinforced when users are invited to use an application."

Facebook last night said advertisers only saw "anonymous and aggregate information" to allow them to target their campaigns and that this meant they were not able to target named individual users.

So while advertisers cannot say they want their adverts to go to specific individuals, they can spell out a very detailed description of the sort of person they want to reach – such as age, location, family background – which means the campaigns will only target a limited group of people.

They said that people's political views could only be passed on to advertisers if the user filled out a specific section on their profiles.

Advertising was also "age-gated", it said, so companies wanting to advertise alcohol would not be shown to people under the age of 18 in the UK.

A spokesman for the company said: "We understand that people share a lot of information on Facebook and we take this very seriously.

"We believe ads that are relevant, social and personalised based on your real interests are better.

"We can show relevant ads in a way that respects individual privacy because our system only provides advertisers with anonymous and aggregate information for the purpose of targeting ads.

"We do not share people's names with an advertiser without a person's explicit consent and we never sell personal information to third parties.

"There is no connection between the privacy settings people choose and our advertising. Whether you use your privacy settings to keep your profile very private, or very public, everyone sees the same amount of advertising down the right hand side of the page.

"Adverts are personalised to the individual user. We do not track peoples' behaviour to serve advertising."

Liam Fox and Adam Werritty

Liam Fox's adviser Adam Werritty facing questions over 'missing' £60,000.

Liam Fox's best man Adam Werritty has been ordered to repay £60,000 given to him to cover the debts of the former defence secretary's controversial charity.

Liam Fox and Adam Werritty Photo: PA

By Jason Lewis, Investigations Editor

9:00PM GMT 12 Nov 2011

He is being threatened with legal action by multi-millionaire Tory Party donor, Michael Hintze, a long time supporter of Dr Fox, who gave him the cash.

The money was handed over weeks before the organisation was formally wound up after an investigation ruled it was breaking charity law and Mr Hintze now wants to know what happened to his money, which is described as "unaccounted for".

The charity, Atlantic Bridge, set up and chaired by Dr Fox, and run by trustees including Defence Minister Lord Astor of Hever, was shut down in September after the Charity Commission questioned its "independence from party politics".

Now details of the "missing" money are set to reignite the scandal surrounding Dr Fox who was forced to resign last month over his relationship with Mr Werritty.

A Cabinet Office inquiry found Dr Fox guilty of breaching the ministerial code after it emerged Mr Werrity was claiming to be Dr Fox's adviser and had set up a number of unofficial lobbying meetings with businessmen for the then defence secretary.

The Sunday Telegraph can reveal that Mr Werritty is now facing a formal demand from lawyers representing Mr Hintze to repay the cash he requested to pay winding up costs of the charity.

Mr Werritty, Atlantic Bridge's only British employee and who was paid more than £90,000 in wages and expenses, has been warned that he could face legal action if the money is not returned.

The 33-year-old businessman is already facing a possible police investigation over how he used cash given to another organisation, Pargav, amid allegations he used it as a slush fund to pay for international travel, five star hotels and hand made suits and bar bills at a lap dancing club.

Now it can been revealed that acting as Atlantic Bridge's executive director, Mr Werritty asked Mr Hintze to donate £60,000 to the organisation last August during a period when the work of the charity, set up to foster the so-called "special relationship" between Britain and America, had been formally suspended.

He was told the money would be used to wind up the organisation.

Mr Hintze, who runs hedge fund CQS, told him he was not prepared to gift the charity the money and instead arranged for a formal commercial loan from his firm to the charity's American arm, Atlantic Bridge Inc.

The loan was arranged by Mr Werritty and an unnamed American law firm acting for the not-for-profit US organisation.

Mr Werrity is understood to have signed the loan forms and the money was wired to an account in the US.

However Amanda Bowman, Atlantic Bridge's American chief executive, claimed she knew nothing about the loan or what had become of the money.

She said: "I have no idea about any of this."

The revelation also raises new questions about how Atlantic Bridge in the UK was being run. Patrick Minford, one of Atlantic Bridge's trustees, suggested little control was kept over how the charity spent its money.

He described the defunct charity as "a very small affair", indicating that the board did not routinely take formal minutes of their meetings.

Professor Minford said: "As far as the minutes of the trustee meetings... they were just ordinary routine meetings to approve accounts and that sort of thing. They were all pretty routine. Atlantic Bridge was a very small affair.

"There wasn't anything much at all really in the way of minutes that I am aware of to be honest.

"I went along to some meetings, probably once a year, we looked at what was going on and said yes this is fine, and have we got the money for it. There was a very small budget."

A spokesman for Mr Hintze said he was seeking a formal guarantee from Mr Werritty that the money will be repaid.

Last week lawyers acting for Mr Hintze sent out letters "demanding clarification of the loan and its status".

Sources close to CQS, Mr Hintze's firm, said Atlantic Bridge's US arm had shutdown its website but was still officially registered with the US tax collection department, the Internal Revenue Service.

The source said that the letters made it "very clear" that the loan was to "Atlantic Bridge in the US" and CQS was "in correspondence with their lawyers".

But the source added that it was Adam Werritty who had directly requested the money.

At the time, the source said, CQS "assumed he had the full authority of the trustees to request the money" but "with doubts being raised about Atlantic Bridge" it has called in its lawyers to investigate.

Atlantic Bridge US law firm and Mr Werritty, who were both involved in arranging the loan have been written to and told "they will either pay back the loan under the terms it was lent or face formal legal action", the source said.

The source added that the loan was made in good faith and exactly how it was going to be paid back "remained unclear".

"The money has so far not been accounted for," the source said.

A spokesman for Mr Hintze said: "Mr Hintze was a donor to Atlantic Bridge, he made those donations in good faith.

"It was a registered charity and had a board of eminent trustees. It was never to fund Werritty's lifestyle, globe trotting or anything else."

The spokesman confirmed Mr Hintze's firm CQS had loaned the organisation money towards "winding up costs". The spokesman added: "No client money is involved."

He added: "Mr Hintze has no connection with Pargav. One of his employee's Oliver Hylton, who was an adviser on charitable matters to Mr Hintze, was a director of it.

"He was initially suspended and now has left the company."

Cyberbullies

Web bullies targeting children in their homes.

Users of social networking sites should be banned from posting comments anonymously because it encourages bullying, say child welfare experts

According to new research social networking websites are being used by children and teenagers to bully each other  Photo: ALAMY

By Patrick Sawer, Julie Henry and Jason Lewis

9:00PM GMT 12 Nov 2011

They offer instant communication and the feeling of being connected to hundreds of "friends".

But social networking websites are being used by children and teenagers to bully each other on a disturbing scale, new research has warned.

Not only are they "posting" hostile and threatening messages, some are even using the technology to send anonymous abusive messages.

A new study to be published this week will show that "cyber-bullying" has now affected a third of teenagers, with many feeling unable to tell parents or teachers about their experience.

This week charities will use a conference in London to call for social networking websites to stop bullies sending messages anonymously, saying that it is particularly damaging to children and teenagers.

The practice, known as "trolling", has been linked to self-harm among victims and even, in the most extreme cases, suicide.

They will say that new websites which make use of Facebook - by far the most popular social networking medium - are encouraging the anonymous posting by making it easy and accessible to under-18s.

The report, by charity the Diana Award, is the biggest study yet of cyber-bullying.

It questioned 1,512 young people aged 11 to 16 across England and found that 38 per cent had suffered abuse online, and that 28 per cent of victims have not told anyone about their experience.

Nearly half of youngsters feel current attempts to prevent online bullying are inadequate.

The report also found that older teenagers are at a greater risk of cyberbullying and are exposed to more aggressive forms of behaviour, such as death threats and explicit images.

The survey will be published as part of national anti-bullying week, which comes after the daughter of Meera Syal, the actress, spoke of the cyber-bullying she suffered when she was accused of "glassing" another pupil at her private school, a charge of which she was cleared.

The lack of regulation of the internet was highlighted last night as Joanna Shields, the head of Facebook in Britain, admitted she had allowed her son onto the site despite being 12, one year under its minimum age.

Last night she closed his account and said: "It was only after much discussion, agreeing to monitor my son online and knowing he was protected by privacy settings we have designed for minors, that I took the decision to allow him to use Facebook.

"However, despite this careful consideration as a family, I am by no means exempt from the rules that govern Facebook and per our policies, the profile has been removed from the site."

Miss Shields is also a trustee of the Save the Children Fund and on a fund-raising board for the National Society for the Prevention of Cruelty to Children, both of whom campaign against bullying.

Beatbullying, the charity endorsed by the Duchess of Cambridge and Prince William as an official recipient of money raised from their wedding, said it was particularly concerned about the growth of "trolling".

One website, Formspring, has been particularly linked to anonymous cyberbullying.

In one of the most disturbing incidents Natasha MacBryde, a 15-year-old from Bromsgrove, in the West Midlands, killed herself in February this year after repeated bullying, including being sent a number of anonymous messages on Formspring.

Her parents, Andrew and Jane MacBryde, said they believed these had played a significant role in the events leading up to her death.

Formspring allows its 25 million members to send unmoderated questions or messages to each other anonymously. Many are drawn into it through Facebook, which itself prevents anonymous messages.

The introduction can work when a Facebook user sees an invitation from a Facebook friend to ask a question. iends. With one click, them find themselves invited to join Formspring and to send invitations to their Facebook friends, creating a "viral" effect.

Victims of cyberbullying have said their tormentors used Formspring to launch vicious character assassinations and post hurtful personal comments.

One 17-year-old girl who suffered weeks of abuse said: "Because they were anonymous they thought they could get away with it. Fewer people would bully online if they had to put their names to it."

Richard Piggin, the deputy chief executive of the children's charity Beatbullying, said: "Users should not have the option of remaining anonymous on sites such as Formspring and other social networking platforms.

"Anonymity encourages people to act in a way they might well not in real life or if they were named online."

He added: "Whatever sites like Formspring say about anonymity allowing people to express themselves, it is clear that it is being used in a negative way by allowing children to hide behind it in order to abuse others.

"Other social networking sites encourage you to use your real identity, which is a positive thing. Formspring needs to make changes."

Ending anonymity is one of a series of reforms charities now want from the websites.

Very few laws govern behaviour on the internet, and it is extremely difficult for police to trace anonymous postings, as the websites which allow them are almost all registered abroad.

Charities want internet and mobile phone networks to provide stronger safeguards against bullying, including better safety features, more regulation and codes of conduct.

They are particularly concerned about how difficult bullying victims find reporting abuse to social networking sites and say that "takedown times" - the speed with which abusive messages are removed must be improved.

Professor Mary Kellett, director of the Open University's Children's Research Centre and co-author of the Diana Award's report, said: "This youth-led report demonstrates the impact that cyberbullying is having on young people's lives, the pace at which it reinvents itself and the inadequacy of current measures to contain it.

"This is no longer an acceptable situation. Politicians and childhood professionals, entrusted with the guardianship of our young people, must take note of its findings and take some bold steps to tackle the issues."

Emma Jane Cross, chief executive of Beatbullying, said: "Bullying and cyberbullying is at epidemic levels.

"Teachers, parents, Government, charities, internet service providers and police must all come together to take the necessary steps required to stop bullying in schools, the wider community and online environment, so that online takedown times are reduced and reporting mechanisms are both accessible and functional."

Formspring is headed by Ade Olonoh, a computer science graduate, who has raised around £8.5 million from a group of venture capitalists who previously made money from investments in Twitter and other internet success stories.

Asked recently in America about bullying on the site and reports that a user in the United Sates had committed suicide after being taunted, Mr Olonoh denied that Formspring lent itself to abuse and complained about the negative way the site was being portrayed.

A spokesman for Facebook said: "We are clear that there is no place for bullying or harassment on Facebook and we respond aggressively to reports of potential abuse.

"We provide our users with the tools to report abuse on every page and the option to block people from having any further contact with them.

"Reports involving bullying are prioritised, reviewed by a trained team of reviewers and removed if they violate our terms.

"Formspring is a separate company - it is not connected to Facebook and we have no partnership with them."