Facebook Privacy Breach Shows Hazards of Social Media for Insurers

On the front page Wall Street Journal story today reports a breach of Facebook users' privacy involving the transmission of personal IDs through popular Facebook apps, such as Farmville, which are predominantly created independent software developers. The WSJ's investigation showed that all of the 10 most popular apps transmit user IDs to outside companies.

The apps reviewed by the Journal were sending Facebook ID numbers to at least 25 advertising and data firms, several of which build profiles of Internet users by tracking their online activities.

A simultaneously reassuring and alarming detail of the Journal story is that "it's not clear if developers of many of the apps transmitting Facebook ID numbers even knew that their apps were doing so." One of the most popular of those apps is Farmville. Created by Zynga Game Network Inc., the app has over 59 million users. The Journal piece mentions Farmville in the context of applications breaching their own privacy policies and quotes a Zynga spokeswoman saying that the company "looks forward to working with Facebook to refine how web technologies work to keep people in control of their information."

A key lesson of the Wall Street Journal investigation is how complex digital communications leaves a trail whereby opportunistic parties can gain access to information deemed to be private and even protected at some levels. That exposure is a reminder of the inherent hazards of electronic networking and that privacy and security require a diligent, proactive approach to ferret out means by which sensitive information may be accesses.

Last week, I&T's Nathan Golia reported that Farmers Insurance has partnered with Zynga to run a promotion in which players can receive Farmers "protection" for their virtual crops. The promotion shows admirable creativity on the part of Farmers but it also shows how insurers can run into situations where their brand can be associated with breaches of privacy.

Social media is a phenomenon that insurers cannot ignore, which we explore in our featured article today "Insurers Come To Grips With the Opportunities and Risks of Social Media." However, insurers must balance their open-mindedness about social media with technical due diligence about the potential exposures caused by utilizing social media sites and partnering with developers of applications that require use of private user information.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio