The Wall Street Journal is reporting that Facebook and the FTC are finalizing a settlement agreement regarding some of Facebook's numerous past privacy flubs. The WSJ reports:

According to people familiar with the talks, the settlement would require Facebook to obtain users' consent before making "material retroactive changes" to its privacy policies. That means that Facebook must get consent to share data in a way that is different from how the user originally agreed the data could be used.

The thing is, that's already the rule. While there's no law that specifically says a company like Facebook can't retroactively change the way it uses user information, the FTC treats it as an unfair and deceptive trade practice - kind of like a bait-and-switch. You decide you're comfortable putting information like your gender and dating status on your Facebook page because Facebook promised it would only show that stuff to your friends. And then it goes and makes it all public: Bait and switch.

Since we don't have comprehensive privacy laws in the US, the only real way to hold companies like Facebook to their word when they say things like "your information is private" is to approach it from a consumer protection angle. Lying to your users about how their personal information is going to be used (or changing your mind later and not telling anyone) is unfair and deceptive, and is exactly the type of thing the FTC can address through fines.

So, making Facebook agree to get express consent before making material retroactive changes to its privacy policies is a bit like making it write "I will not chew gum in class" fifty times on the blackboard before it can go out to recess. The really interesting part of the settlement agreement is that, like Google did in the Buzz settlement, and Twitter did concerning its security, Facebook is agreeing to submit to independent privacy audits for the next twenty years.

My hope for the long term outcome of this settlement agreement is that Facebook will be more upfront and transparent about their privacy practices, and not pull the bait-and-switch move on privacy that they've become known for. Hopefully, this will in turn lead to fewer Facebook-privacy-policy-instigated Chicken-Little-style paranoia outbreaks.

Various ISPs have been pushing for metered broadband for a while now, and we've wondered in the past who will monitor the broadband meters themselves to make sure they're accurate? After all, with things like energy meters, they're carefully regulated and audited to make sure they're accurate. But no such luck with broadband meters, for the most part. Broadband Reports points out that it looks like individuals will be on their own to check on whether or not their ISP is being honest with them concerning how much bandwidth they use.

The BSA's actions often seem so short-sighted that it makes you wonder if the organization is actually working against the interests of its membership on purpose. We've detailed in the past how the BSA loves to trot out bogus stats to support its claims about software piracy rates and the supposed "damage" it does to the economy -- but a bigger issue is the practice of BSA software audits. A year and a half ago, the Associated Press exposed the BSA's auditing practices as being highly questionable, bordering on what many would consider to be outright extortion. The organization targets lots of small companies and has no mercy. So even if it was a simple misunderstanding over what a hugely complex software license allowed, the BSA still demands money. And the most stunning part? The BSA keeps the money. According to the AP piece, the BSA (unlike some other organizations) does not distribute the money it gets from fining companies for software licensing violations.

But the bigger issue is that these practices, which are productivity killers for companies, and make many small businesses feel like their software vendors are treating them like criminals, are driving companies to look for alternatives from providers who won't accuse them of infringement at the drop of a hat, and send in a bunch of auditors. Especially in the middle of an economic downturn, treating customers as if they're criminals isn't a very good strategy.

So, what is the BSA doing? Yes, that's right, it's pumping up its software audit program, sending 1,000 audit letters to companies in London, officially demanding they detail their software usage -- while unofficially acting as a tremendous advertisement for open source software, where providers don't treat their customers as if they were criminals.

With all the recent talk of metered broadband, there are some questions raised: such as how will the usage actually be metered? As that report notes, broadband providers should not be allowed to meter the broadband themselves, because that represents an obvious conflict of interest -- and when it comes to things like electricity and gas pumps, regulations require third party inspectors or equipment to make sure that the meters are accurate and not subject to tampering by the company. So wouldn't broadband require the same thing?

An anonymous reader sent in the following story about how some large software companies are suddenly increasing the number of "software audits" they're doing of enterprise buyers. Most enterprise software contracts include license terms that allow the software provider to "audit" the buyer, to make sure they're not abusing the license. As the article notes, however, such audits usually only come at one of two times: (1) when a company threatens to switch to another vendor or (2) when the company has received info from a reliable source that the license was being abused.

However, it looks like with the economy in freefall -- and IT spending being cut back, some enterprise software companies might be thinking that another way to squeeze some money out of customers is to audit them and force a larger bill on them. Of course, this seems like a plan that could backfire in a big, big way. As noted in the article, being audited is not a pleasant experience at all. It's basically a vendor claiming that it thinks you're breaking your agreement. It's not the best way to build up a strong relationship of trust. Because of that, a sudden increase in totally unexpected and uncalled for audits may seriously damage a company's reputation and drive them to proactively look for alternatives from companies who trust them. Treating your customers like criminals is never a good idea...

It still seems rather amusing (if not twisted) that some patent system supporters are trying to convince the world Google would be harmed by an absence of software patents. Instead, it seems increasingly obvious that it would only serve to help Google, who is a regular target of questionable patent infringement lawsuits. Take the latest such case as an example. A company by the name of Web Tracking Solutions, which ironically enough, doesn't appear to have much of a web presence (if any), has sued Google for patent infringement, claiming that its patent on third-party on-line accounting systems is being violated by Google's AdSense offering.

Try to read the patent without gagging over the question of what the USPTO was thinking when it approved this as a "non-obvious" process. Basically, it describes a system for tracking ad clicks on third party websites, and then showing that information (how many clicks, etc.) for customers of an ad service. In other words, apparently the USPTO thought that the idea of actually accounting for how many ad clicks were made by an advertising service to its clients is somehow deserving of monopoly protection. I would imagine that Google would be perfectly fine losing its own patents if it meant not having to defend against these sorts of lawsuits on an all too regular basis.

Last week, in writing about the Italian government's defense of its decision to put everyone's tax returns online for everyone else to see, we noted the bizarre statement by the official who made the decision: "In the USA, tax filings are already public, check any American TV-movie and you'll see." This totally false statement didn't get much play in the American press (someone in the comments suggested that maybe it seemed so unbelievable that the press thought he was joking). However, as if to make it painfully clear how false this statement actually is, five IRS employees have been charged for snooping on tax returns they were not authorized to look at. While it is a little troublesome that IRS employees were able to do this in the first place, it's at least somewhat comforting that the IRS's auditing system seems to be able to catch people doing this, even when they're only looking at a very small number of unauthorized returns (each worker only looked at one to four unauthorized returns).