Privacy blunders: good for innovation?

Is Facebook a better social network thanks to its catalogue of errors and missteps?

A plan by Facebook looks set to cause waves. According to a report in the Huffington Post:

Facebook will be moving forward with a controversial plan to give third-party developers and external websites the ability to access users’ home addresses and cellphone numbers in the face of criticism from privacy experts, users, and even congressmen.

Facebook quietly announced the new policy in a note posted to its Developer Blog in January. It suspended the feature just three days later following user outcry, while promising that it would be “re-enabling this improved feature in the next few weeks.”

In response to a letter penned by Representatives Edward Markey (D-Mass.) and Joe Barton (R-Texas) expressing concern over the new functionality, Facebook reaffirmed that it will be allowing third parties to request access to users’ addresses and phone numbers.

The plan certainly pushes the boundaries and could well end up being listed as another Facebook privacy blunder, but are such blunders necessarily a bad thing? Not everybody thinks so. Tim O’Reilly, founder and CEO of O’Reilly Media, Inc., is one such person: in fact, he thinks privacy blunders are a key ingredient of innovation. In a blog post entitled My Contrarian Stance on Facebook and Privacy last May, Tim made the following comment: 

“The essence of my argument is that there’s enormous advantage for users in giving up some privacy online and that we need to be exploring the boundary conditions – asking ourselves when is it good for users, and when is it bad, to reveal their personal information. I’d rather have entrepreneurs making high-profile mistakes about those boundaries, and then correcting them, than silently avoiding controversy while quietly taking advantage of public ignorance of the subject, or avoiding a potentially contentious area of innovation because they are afraid of backlash. It’s easy to say that this should always be the user’s choice, but entrepreneurs from Steve Jobs to Mark Zuckerberg are in the business of discovering things that users don’t already know that they will want, and sometimes we only find the right balance by pushing too far, and then recovering.”

“The world is changing. We give up more and more of our privacy online in exchange for undoubted benefits. We give up our location in order to get turn by turn directions on our phone; we give up our payment history in return for discounts or reward points; we give up our images to security cameras equipped with increasingly sophisticated machine learning technology.”

“But let’s not make privacy a third rail issue, pillorying any company that makes a mistake on the privacy front. If we do that, we’ll never get the innovation we need to solve the thorny nest of issues around privacy and data ownership that are intrinsic to the network era.”

It’s an interesting contention and Tim is absolutely right when he says, “there’s an enormous advantage for users in giving up some privacy online”; disclosing and sharing information is what social networking, social buying and the social web are all about. I don’t, however, think he is right in inferring that privacy blunders are essential components of innovation and invention. At the end of his post Tim says, “We need to heed the advice of management gurus Tom Peters and Esther Dyson. Tom reminds us to ‘Fail. Forward. Fast.’ Esther’s tag line is ‘Always make new mistakes.‘” Yes, failures and mistakes are inevitable – especially when implementing changes in complex environments such as Facebook – but those failures and mistakes should happen in a sandboxed environment during testing. Yes, the Zuckerbergs and Jobs of this world may be “exploring the boundary conditions” but that does not give them the right to be careless with our privacy and nor does it excuse their blunders. We wouldn’t accept banks being careless with our data, and we shouldn’t be accepting if Facebook et al are careless with it.

In my opinion, we should indeed be “pillorying any company that makes a mistake on the privacy front.” Doing so will not stifle innovation; it’ll simply pressure companies to respect our privacy.

What do you think? Is Facebook a better social network thanks to its catalogue of errors and missteps? Leave a comment and share your thoughts.