As of this morning, the Petition: Facebook, stop invading my privacy! group has 10,141 members. At some point the group should get the attention of the powers-that-be of Facebook and their advertisers.

I have joined the group and signed the associated petition because I can see how Facebook is bending a number of social rules and not championing a culture of security and privacy. This is not a concern for those who are cautious about the handling and sharing of their information but for those who haven’t been educated on how and when to trust the companies and people they deal with. And, for the record, Facebook has offered a boatload of reasons for people to not trust them.

Perhaps the biggest problem is the way in which companies (read: their lawyers) structure their Terms of Use, Usage Agreements and Privacy Policies. The agreements are often confusing even for well educated people and, more significantly, they’re unnecessarily long. By structuring their agreements in this manner, companies are purposefully taking advantage of their market. I would go so far as to say that they are ’setting up’ their market to take the fall.

Larry Lessig’s approach to contracts is a model that should be adopted by all legal departments - particularly those that are playing in the Web 2.0 playground. The Creative Commons license agreement takes a convoluted legal document and summarizes it in a simple and elegant deed that everyone can understand. Basically, Mr. Lessig has put the power of the law where it belongs — in the hands of the commons. By doing so, he has equipped them to self-regulate which is what people want in Web 2.0. [Hey Larry! Can you create the Privacy Commons???]

Facebook can argue that it offers a great deal of flexibility for its members to make changes to their privacy settings. This abundant flexibility is confusing and takes a fair bit of time to understand and tweak because there are many groupings of granular privacy settings — some settings may override others. Facebook needs to offer a simpler model with stronger default settings and have the additional flexibility available should people want the granular control.

Facebook is being presented with a beautiful opportunity to set the example for all Web 2.0 companies by establishing and managing a simplified and sustainable culture of trust for its community. The ball is in their court and whether they dribble, pass or go for the net will determine the future of Facebook and its peers.

BOOK RECOMMENDATION… The Privacy Payoff: How Successful Businesses Build Customer Trust written by Ann Cavoukian (Privacy Commissioner, Province of Ontario) and Tyler Hamilton.