Source: http://feeds.feedburner.com/~r/Techcrunch/~3/214895356/
Beacon is interesting, as Zuckerberg puts it, because “What would you rather see? A banner ad from Bloomingdale's or that one of your friends bought a scarf?”
Exactly. Except there were two fundamental problems with Beacon. The first problem, now resolved, was that users were unwittingly participating and sharing this information. Now users can choose to opt out of Beacon. Not as good as an opt-in, but its a move in the right direction.
The second problem hasn’t been resolved, though. Facebook is allowing advertisers to use user images and names in their ads. So if one of your friends adds a third party application, you may see an advertisement that shows their picture, prints their name and says that they’ve added the application.
Certainly click throughs and responses increase with the addition of a recommendation from a friend in an advertisement. But all of this may be in violation of publicity rights in place in many states that prohibit the commercial exploitation of a person’s image and likeness without permission or contractual compensation. The image to the right is an example that a confused reader sent to me - he saw the ad on his profile and wondered if I was affiliated with Blockbuster’s Movie Clique application or with the Jackass movie.
As far as I can tell there is no point where users are agreeing to the use of their image and name in advertisements, explicitly or even buried in the terms and conditions of the site. Whether or not it violates people’s privacy rights is a legal issue, and one that doesn’t appear to have been pushed to the lawyers yet. But the ice is rather thin, and Facebook is treading away.