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Potential Commerce Applications Drive Facebook’s Interest in Real User Identities

Patricia McGinnis by Patricia McGinnis
August 8, 2011
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Does your Facebook account informationinclude your real name, or a pseudonym? When you set up youraccount, did you provide your primary e-mail address, or analternate? Recent pronouncements by Facebook’s head of marketing,Randi Zuckerberg, have focused on the company’s belief thatanonymity has to disappear in the online world, or at least, inFacebook’s world. Facebook wants to know who we really are.

TechCrunch’s Semit Shah presents the pros and cons of thedebate:

“The topic of online identity and anonymity ispolarizing. Powerful interests have strong incentives to build aweb where real identities rule. Other powerful interests will fightrelentlessly to protect and preserve spaces for users to interact,either anonymously or through pseudonyms.”

He then outlines his analysis of the waysthat secure, verifiable online identities could be useful (and moreefficient) to all of us, and concludes with his belief thatFacebook, LinkedIn, and the like are well-suited to thistask.

“The real economic potential these types ofcompanies have is in verifying and authenticating our identities sothat they can provide us with an interesting and fun onlineexperience, connect with parts of our professional and personallives, and potentially power a new type of commerce that couldgenerate massive sums of revenues and profits while saving us all atremendous amount of time, money, and stress.”

Can we agree with him? In practice, I thinknot. I do agree that a trusted online identity management providerwould be a solid addition to our online lives, but I see no reasonto allow the social networks to usurp that role. Other socialnetworks (e.g., Hyves in the Netherlands) have taken on thisidentity validation function to facilitate payments and purchases.However, Dutch privacy law severely constrains the ability of Hyves(or any other entity) to use personal information without specificpermission, so Danish consumers have far more privacy protectionsthan those in the U.S. Experience suggests we in the U.S. should bevery cautious about empowering Facebook with that capability,because we have no defense against Facebook using all theinformation they have to their own advantage and for their ownpurposes.

The U.S. Commerce Department recognized the importance of identitymanagement in its recent report “NationalStrategy for Trusted Identities in Cyberspace.” This reportdoes not propose a government-operated identity program for theU.S., but rather, contends that the best solution would be one thatcomes from the private sector. Surely committed identityspecialists can craft a potential solution that reflects a respectfor individual privacy somewhat more designed to protect consumerinterests. I suggest we not surrender this powerful capability toFacebook simply because they want it.

Click here to read the TechCrunch piece: http://techcrunch.com/2011/08/01/facebook-real-identities-commerce/

Tags: DebitMercator InsightsMerchant AcquiringMobile PaymentsPrepaidSelf Service and ConvenienceSocial Media
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