Facebook Offers New Deals: The Cost is Your Privacy

According to TIME Newsfeed, Facebook is taking on a new marketing giant – Groupon. Groupon.com has gained popularity extremely fast  due to the huge discounts they offer users on a daily basis. Their average discount ranges from 50% to 80% off of food, services, shops and entertainment. They boast over 18 million subscribers and have sold over 12 million deals. It is no wonder that Facebook would want a piece of the action — when Groupon featured clothing giant GAP on their site, they sold 400,000 deals, making them $11 million.

But there is a catch: Facebook Deals only goes hand in hand with Facebook Places.  In order to receive the promotions, you have to use their location sharing app and “check in” to get the deal. In other words, to gain the benefits offered by Facebook Deals, you have to sacrifice more privacy. Groupon only asks users for their city location in order to tailor deals to their area. To take advantage of a deal, you must share your address and billing information, and that is done on their secure checkout site.

Although some copycat ideas have worked in the past (Facebook Places) this type of offer may fall more along the lines of Google Buzz. While in theory Google Buzz was offering a mini feed in their popular Gmail web service, similar to Facebook and twitter, they lacked users because people were already using other sites to report their daily activities. A third place to check in was extraneous. With the popularity and ease of Groupon, users may not be as inclined to give up their privacy for Facebook Deals when they are already receiving great deals.

Facebook is still not secure for transaction processing. Where your bank and other financial sites offer secure browsing, Facebook doesn’t even warn its users of current privacy issues. With so many recent privacy breaches by Facebook, users should be more wary of giving the social networking site more private information than they already have.

John Sileo is the award-winning author of Stolen Lives and Privacy Means Profit (Wiley, August 2010), a professional Social Networking Speaker and America’s leading identity theft expert. His clients include the Department of Defense, FTC, FDIC and Pfizer; his recent media appearances include 60 Minutes. Contact him on 800.258.8076.