As Facebook turns off facial recognition in Europe, is this the start of a change for the company?

Meet the new social network, not quite the same as the old social network.

After a long struggle with the Irish Data Protection Commission, Facebook is set to delete the last tranche of data kept from its facial recognition feature, dubbed Tag Suggestions, and turn it off for all users today. It just the latest retreat in a series of changes which may redefine the company.

The Tag Suggestions feature was first announced in December 2010. By using a mixture of information about facial shape and features, and contextual clues such as other people in the same album or picture, Facebook is able to suggest to users the names of other people in photos they have taken. Similar capabilities appear in other software – Apple's iPhoto, for instance, has an offline version – but Facebook's implementation leverages its vast user base to get more data than any competing company could manage.

However, Facebook implemented the Tag Suggest feature as an automatic opt-in for all users. That, combined with the fact that most photos on Facebook aren't uploaded by their subjects – obviously, since someone is normally behind the camera – meant that it necessarily played fast and loose with privacy concerns.

Just six months after it was announced, the first objections were raised in the US, and in August 2011, a Hamburg court became the first to rule that it must be opt-in to comply with local privacy laws. A month later, the Irish DPC began a wide-ranging privacy audit in response to complaints from a user group, Europe v Facebook, which included in its remit the facial recognition issues.

Since Facebook's European operations are based in Ireland – largely for tax reasons, since the company has a corporation tax rate of just 12.5 per cent for trading income – the decision of the DPC has wide-ranging effects. The first report, in December 2011, gave Facebook six months to comply with a number of requirements. "Shadow profiles" – profiles made of people who haven't joined Facebook from information uploaded by their friends – had to go, while data retention for searches and ad-clicks was limited, to six months and two years respectively.

The DPC also required Facebook to provide a prominent warning to its European users that it uses facial recognition technology that automatically tags them in photographs.

It was this last requirement which Facebook seems to have found too hard to comply with. In September, it closed Tag Suggestions to new users, and this month, it is shutting the feature entirely in Europe, and trashing the already collected data.

It's a bold move to take for a company which has, in other markets, been doubling down on facial recognition technology. In June, Facebook bought Israeli company, for a reported $55m. was the provider of much of the technology used by Facebook, and the company argued that the transaction "simply [brought]… a long-time technology vendor in house."

The company has always known that privacy concerns are one of the largest hurdles it has to to overcome. In its IPO prospectus, filed in February, Facebook highlighted a number of privacy-related risks to its business, from the publicity pitfalls associated with moving faster towards "frictionless sharing" than it's users are comfortable with, to the hurdles that stricter privacy regulation could introduce.

The facial recognition skirmish is an unusually under-the-radar battle for Facebook, however. Most of its highly publicised missteps involve public information being shared without the explicit permission or notification of users. This includes, for example, the ability of friends to "check in" people in Facebook Places without asking, as well as the various concerns over the frictionless sharing of social readers and apps like Spotify.

In fact, the first major privacy battle Facebook had to fight was over this type of issue, though in hindsight it demonstrates nothing so much as how much more comfortable we've become about sharing online. In September 2006, Facebook activated the News Feed, a feature now associated with the company more than anything other than, perhaps, the "like" button. But at the time, the idea of aggregating all this information – publicly available, but never before displayed in one place – was enough to spark user rebellion.

In what has become typical for Facebook, the company bet the business on people getting used to the new rules of the game. And they did, just like they did with the changed default privacy settings, the creation and promulgation of "" email addresses, and the aforementioned Places feature.

But three recent moves by Facebook suggest that the company may be changing its attitude, both voluntarily and as a forced reaction to circumstances.

The first is the deletion of facial recognition data, as well as the other changes mandated by the DPC. Facebook has always dealt quite well with user discontent – if only by successfully ignoring it – but when the law gets involved, it can be forced to backtrack far further than it normally would. It also means that it can be held to account for infractions of privacy which the average user simply won't notice.

Not many of us realised Facebook was even tracking search data, putting together a profile of us which we can't see, and few would have cared even if we did. But the DPC, like other information commissioners worldwide, has the authority and remit to ensure that data is collected with permission, and not retained indefinitely. Facebook knows it will face these problems with greater regularity as other nations step up to their responsibility to protect their users, and that will surely change its attitude.

The second is that Facebook itself has been backtracking from frictionless sharing, which had the potential to be one of the biggest clashes between it and its users. Andy Mitchell, Facebook's Manager of Media Partnerships, said last month that the company was moving away from it because user feedback wasn't good. This isn't just an issue with people being displeased that what they thought was private was in fact public – although that has happened as well.

For Facebook, the bigger issue is that the results of frictionless sharing just aren't particularly interesting. Sure, Facebook would like to know every news story you read, or every song you play, because it helps them build up a formidable picture of you to sell to advertisers. The problem is that social media is only interesting to anyone else if it allows people to present a curated vision of themselves. Nobody cares about the full list of songs you've played, but they may want to hear the one which is your absolute favourite at the moment. If Mitchell is to be believed, Facebook has come around to this way of thinking. The privacy benefits for users should be obvious.

The third change by Facebook is perhaps the most important. It is that the company is demonstrating a growing awareness that advertisement income alone cannot help the company achieve the goals its shareholders have set for it. It's tricky to estimate a price/earnings ratio for Facebook, since it hasn't released any results since it went public, but Business Insider estimate it's around 32. That means that you would need to hold Facebook stock for thirty-two years for it to make profit equivalent to the amount of capital you've provided them – or, more accurately, it means that the majority of Facebook's shareholders expect it to start making more money.

The problem is that Facebook's previous earnings growth has come largely from user growth. But with over a billion users, it starts to get very tricky to get any growth – the size of the planet is a constraining factor. As a result, Facebook needs to get more money per user.

One way to do this is, of course, to make ad space more valuable to advertisers, and that's what all of the company's social profiling is aimed at; but that's unlikely to be enough. For perhaps the best hint of the future, look to Facebook's recent launch of Facebook Gifts. The tagline is "Real moments. Real gifts." But perhaps the phrase "Real money" should be added there, because that's what is really important. Facebook wants you to spend real money buying gifts for friends through them – and then, of course, take a cut of the transaction that follows.

A Facebook which makes money from the services it provides, rather that providing services as a sidebar to its real business of selling your data to advertisers, is a company which has a vastly longer half-life. I hope they know that too.

The facebook hompage in 2005. Photograph: Wikimedia Commons

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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“A cursed project”: a short history of the Facebook “like” button

Mark Zuckerberg didn't like it, it used to be called the “awesome button”, and FriendFeed got there first. 

The "like" button is perhaps the simplest of the website's features, but it's also come to define it. Companies vie for your thumbs up. Articles online contain little blue portals which send your likes back to Facebook. The action of "liking" something is seen to have such power that in 2010, a class action lawsuit was filed against Facebook claiming teenagers should not be able to "like" ads without parental consent. 

And today, Facebook begins trials of six new emoji reaction buttons which join the like button at the bottom of posts, multiplying its potential meanings by seven: 

All this makes it a little surprising that Facebook CEO Mark Zuckerberg spent a good portion of the noughties giving the like button a thumbs down. According to Andrew Bosworth, Vice President of Advertising and Pages at Facebook (and known simply as "Boz") it took nearly two years to get the concept of an approval button for posts off the ground.

In a fascinating Quora thread, Boz explains that the idea of a star, plus sign or thumbs up for posts first came up in July 2007, three years after "TheFacebook" launched in 2004. Throughout these initial discussions, the proposed bursts of positivity was referred to as an "awesome button". A few months later someone floated the word "like" as a replacement, but, according to Boz, it received a "lukewarm" reception. 

The team who ran the site's News Feed feature were keen, as it would help rank posts based on popularity. The ad team, meanwhile, thought "likes" could improve clickthrough rates on advertisements. But in November 2007, the engineering team presented the new feature to Mark Zuckerberg, and, according to Boz, the final review "[didn't] go well". The CEO was concerned about overshadowing the Facebook "share" and comment features - perhaps people would just "awesome" something, rather than re-posting the content or writing a message. He also wanted more clarification on whether others would see your feedback or not. After this meeting, Boz writes, "Feature development as originally envisioned basically stops". 

The teams who wanted the button forged ahead with slightly different features. If you were an early user, you might remember that News Feed items and ads collected positive or negative feedback from you, but this wasn't then displayed to other users. This feature was "ineffective", Boz writes, and was eventually shut down. 

So when Jonathan Piles, Jaren Morgenstern and designer Soleio took on the like button again in December 2008, many were skeptical: this was a "cursed project", and would never make it past a sceptical Zuckerberg. Their secret weapon, however was data scientist Itamar Rosenn, who provided data to show that a like button wouldn't reduce the number of comments on a post. - that, in fact, it increased the number of comments, as likes would boost a popular post up through the News Feed. Zuckerberg's fears that a lower-impact feedback style would discourage higher value interactions like reposting or commenting were shown to be unfounded. 

A bigger problem was that FriendFeed, a social aggregator site which shut down in April 2015, launched a "like" feature in October 2007, a fact which yielded some uncomfortable media coverage when Facebook's "like" finally launched. Yet Boz claims that no one at Facebook clocked onto FriendFeed's new feature: "As far as I can tell from my email archives, nobody at FB noticed. =/". 

Finally, on 9 February 2009, "like" launched with a blogpost, "I like this", from project manager Leah Pearlman who was there for the first "awesome button" discussions back in 2007. Her description of the button's purpose is a little curious, because it frames the feature as a kind of review: 

This is similar to how you might rate a restaurant on a reviews site. If you go to the restaurant and have a great time, you may want to rate it 5 stars. But if you had a particularly delicious dish there and want to rave about it, you can write a review detailing what you liked about the restaurant. We think of the new "Like" feature to be the stars, and the comments to be the review.

Yet as we all know, there's no room for negative reviews on Facebook - there is no dislike button, and there likely never will be. Even in the preliminary announcements about the new emoji reactions feature, Zuckerberg has repeatedly made clear that "dislike" is not a Facebook-worthy emotion: "We didn’t want to just build a Dislike button because we don’t want to turn Facebook into a forum where people are voting up or down on people’s posts. That doesn’t seem like the kind of community we want to create."

Thanks to the new buttons, you can be angry, excited, or in love with other people's content, but the one thing you can't do is disapprove of its existence. Championing positivity is all well and good, but Zuckerberg's love of the "like" has more to do with his users' psychology than it does a desire to make the world a happier place. Negative feedback drives users away, and thumbs-down discourages posting. A "dislike" button could slow the never-ending stream of News Feed content down to a trickle - and that, after all, is Facebook's worst nightmare. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.