Facebook and the FTC settled a complaint today concerning privacy. Since its inception, Facebook has had to induce trust to get people to share things about themselves. One way they did this was to tell people that they could control their own privacy on the site. Trust helps people overcome their fear of being vulnerable that someone might use their information to do damage to them. The FTC complaint very clearly suggests that Facebook lied to users when it said that they could control their privacy and that Facebook would not share their private information with third parties. This is like you telling a friend in your social circle some confidential information after he promises you that he will not reveal it unless you give the OK. He then goes out and makes that information available to everyone. From a trust perspective, the FTC complaint is devastating to Facebook.

Like many SEC settlements, this FTC settlement has one major defect - the public does not get the full truth and therefore cannot judge the trustworthiness of Facebook. There is no agreement of the facts of the betrayal of trust. The FTC complaint alleges that there were mutliple breeches of trust but Facebook has not admitted what they did wrong. Mark Zuckerberg's blog that they "made a bunch of mistakes" does not live up to Facebook's claim of full transparency. Full transparency in this case would be admitting clearly and fully what was done wrong, apologizing and putting reforms in place to make sure it does not happen again. Zuckerberg should read Amazon's CEO Bezo’s apology for erasing data on Kindles. Facebook's trust repair is starting off looking more like hapless News Corp than companies that do it right like Mattel and Amazon. It appears that Facebook is listening more to their lawyers than they are to those who understand how their users think about this basic and fundamental thing called trust.