UPDATED 07:37 EDT / OCTOBER 18 2010

Facebook Apps Caught Leaking User Data, Privacy Undergoes More Regulation

The Wall Street Journal released an alarming report this morning, sending several into a frenzy regarding the privacy of their Facebook profiles.  What WSJ found is that several Facebook apps are sending user IDs to third parties, like advertising networks.  This is taking place unbeknown to many Facebook users, and also violates the social network’s terms for apps’ use of profile information.

Appls like Farmville and LOLapps have been caught transmitting user IDs, with Facebook even going so far as to shut LOLapps down all together. LOLapps has since been restored, but this is looking like Beacon all over again.  Apparently we as consumers need a regular 6-month check-in to ensure Facebook apps and advertisers are still handling profile information accordingly.

Facebook issued a statement over the weekend, hoping to address these privacy concerns before they get out of hand, saying “This is an even more complicated technical challenge than a similar issue we successfully addressed last spring on Facebook.com,” quotes WSJ, “but one that we are committed to addressing.”

In light of Facebook’s Instant Personalization initiative, among others, it looks like Facbook still needs to step back and consider the directions it’s taking with monetizing user information, and making it accessible to third parties.  So far, Facbook has been very selective in choosing partners specifically for Instant Personalization, but these recently uncovered app leaks raise a new set of concerns that could affect a consumer’s affinity for something like customized Facebook experiences within, and outside of, the network.

It’s an issue that’s plaguing the app industry even beyond Facebook, as mobile apps have been another way in which user information is being leaked.  Android apps in particular have faced this problem on multiple occasions, and Apple apps have fallen prey as well.  With apps often requiring a good portion of consumer data and interaction, the threat of security breaches is one that can grow at the mere thought of it.

For Facebook’s current predicament, there doesn’t appear to have been any major damage done.  Facebook has noted that there is no evidence of misuse of personal information by these third parties.  Nevertheless, it’s a huge consideration for Facebook’s system to regulate, especially as it moves into the mobile realm.

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