Facebook Places: A Privacy Breach Waiting to Happen?

By Katie Kindelan Comment

Is a coupon worth your privacy? That may be the dilemma facing Facebook users excited to redeem special deals through an expansion of the site’s Places feature.

With the introduction of the new deals program, users of Places will now see a yellow icon indicating that a redeemable deal or coupon is available nearby. They can then use the application to “check in” at the store or restaurant, from their local Gap to McDonald’s, and show their phone’s screen to an employee to claim their deal.

Since launching Places in August, Facebook has come under fire for privacy breaches, from third-party apps to Firefox add-ons, that have made users nervous and put the company under a tight media and Congressional glare.

The new feature may not do much for the company in easing those concerns.

To take advantage of the program, users first have to reveal their location to Facebook by checking into Places. From there, the company is betting the success of the program on users’ willingness to reveal their shopping habits.

What makes Places unique, and a good deal for users, is that it incentives businesses to offer special deals to new and returning customers. But, once Facebook knows you’re a loyal customer of the clothing chain H&M, for example, or really love a McDonalds’ hamburger, then don’t be surprised if you see H&M and McDonalds’ ads plastered all over your Facebook Wall.

What remains to be seen, or clarified by Facebook, is what they plan to do with this data. Users should wonder whether they will keep it in-house or release it to third-party advertisers or other companies.

And even if Facebook pledges to not release the data, what happens in the face of a privacy breach?

For now, the new feature is only available through Facebook’s iPhone application. Android users, meanwhile, must search for local deals through a dedicated mobile Web site.

The announcement came at a much-hyped Facebook mobile event at which the company also launched several new location-based features for iPhone, Android and touch.facebook.com.

The news was seen as an attempt to leverage the site’s more than 200 million mobile app users and social connections to corner the location-based social networking site now led by sites like Foursquare, Gowalla and Google.