Facebook FTC Settlement is Not Trustworthy

November 30, 2011

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.

 

Judge Rakoff Stands for Truth and Restoring Trust

November 29, 2011
Judge Rakoff once again stands for restoring trust by insisting that the SEC provide facts concerning wrong doing rather than settling out of court and allowing Citibank to claim no wrong doing. He rejected a 285 million dollar settlement because there was not real agreement concerning the truth about what Citibank did wrong. The alleged betrayal of trust was in concealing the fact that they had deliberately designed an instrument to fail, like Goldman's Abacus deal. It was alleged that they ...
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Penn State and Restoring Trust

November 10, 2011
The Board of Trustees at Penn State has fired its President and its legendary football coach. Is their action an example of appropriate justice or overreaction? The answer lies in understanding something about repairing trust and reputation after there has been a serious betrayal. The Board's first role is to repair the University and its reputation. To do this a few things are necessary from research on successful trust repair. They must acknowledge and take ownership of the failures, act im...
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Restoring Trust is the Solution - Not Occupying Wall Street or Washington

October 11, 2011

The genesis of the protests on Wall Street and among the Tea Party are the same: frustration with the institutions (Business an d Government) that appear to many to have breeched our trust. How refreshing that we are finally seeing democracy at work and the righteous anger that may lead to accountability of these fundamentally flawed trustees.


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