Post-IPO, Facebook will have to make privacy investigations public

When it comes to information privacy concerns, Facebook already has a bullseye on its back. That won't change now that Facebook is going public in its highly anticipated Initial Public Offering (IPO). But disclosure rules affecting publicly traded companies may force Facebook to reveal privacy-related investigations that it otherwise might have kept secret.

Facebook won't face any new regulations or government oversight specifically related to privacy, according to the experts who spoke to Ars. But in the cases of inquiries from the Federal Trade Commission or attorneys general, investigations that might otherwise remain private would become public because Facebook will be forced to disclose events that could have a material impact on earnings. Facebook settled a case with the FTC only last November, but it was known beforehand that privacy rights groups were asking the FTC to investigate Facebook, and details of the settlement were leaked shortly before the official FTC announcement. Still, it is possible for private companies to keep investigations secret in cases where public companies cannot, because the FTC does not announce investigations before they are concluded, and may not announce them at all, said Jules Polonetsky, director of the Future of Privacy Forum and former Chief Privacy Officer for both AOL and DoubleClick. Various quarterly and annual filings with the Securities and Exchange Commission must inform the public about risks potentially affecting earnings, which may include investigations into privacy practices.