Why it’s time for Facebook to offer a “pay for privacy” feature

Facebook’s privacy policies are back in the news again, and they reflect a major improvement — to the company’s PR strategy. Otherwise, it’s just the same old deal in which Facebook users agree to hand over more personal information in exchange for the right to use the service for free.

[company]Facebook[/company] slipped in the latest changes on Thursday morning, while hyping a new series of cutesy illustrations and “you’re in charge” messages that purport to educate users on how the social network uses their data. Users still don’t really get a say in how that data is used, though, as the New York Times notes:

Also noticeably absent from the new privacy explanations is the simple fact that Facebook users have very little control over how their information is used in advertising. The company asserts the right to use anything you do on Facebook to help it target ads to you, both on and off the service.

Facebook even tracks what you do on other websites and will use that information for advertising, too, unless you explicitly opt out of the extra tracking — an option that requires a trip to a third-party website or soon, the tweak of a setting on your mobile phone.

For now, the biggest practical consequences of the latest privacy changes, as Re/code observes, is that Facebook gets to gobble new data about your payment habits and your location. If you don’t like the new arrangement, your option is the same as it has always been: don’t use Facebook.

If this is the case, then, why is Facebook going to such lengths to talk up its new privacy “features” — such as Charlie the “privacy dinosaur” — in the first place? On one hand, this is a smart public relations exercises that lets Facebook, rather than critics and consumer groups, be the first to define what the changes are all about. And on the other hand, the company is just complying with the law: in light of a 20-year order from the FTC, Facebook must tell people when it changes its policies or else face nasty fines.

Overall, the arrangements make sense. It’s a good thing that Facebook is openly discussing its privacy policies and reminding consumers that many of its new features will also require more data disclosures. Still, there’s also the reality that all of the messages about “privacy check-ups” and “you’re in charge” serve to obscure the basic bargain at work here: consumers must pay in data to use Facebook’s service.

A better solution, then, would be to give Facebook users the choice to pay with money instead of data. In practice, this could mean that Facebook users could pay a monthly subscription fee and, in return, the company would agree not to share information about their likes, location or history with advertisers. The fee might be set at $5 a month — which seems reasonable given that some estimates set the ad value of each Facebook user at $128 — and could be adjusted lower for users who agreed to give up more data.

In this scenario, everyone would win: Facebook would not have to worry about privacy concerns costing it revenue, while consumers would know that “you’re in charge” meant more than a slogan. Such a system, in which Facebook users could choose to pay for privacy, would be infinitely better than the current system of pandering and public relations exercises.