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 Face.com, for a reported $55m. Face.com 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 "@facebook.com" 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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Pupils need internet classes? Here are 41 lessons they should learn

Forget privacy and security, here's what to do when a black and blue dress looks white and gold. 

It is imperative that children are taught how to survive and thrive on the internet, claims a new House of Lords report. According to the Lords Communication Committee, pupils need to learn how to stay safe, avoid addictive games, and become “digitally literate”.

It’s hard to argue with the report, which is a great step forward in acknowledging that the internet now basically = life. Yet although it is crucial that children learn how to stay private and secure online, there are also some equally crucial and not-at-all-flippant pieces of information that the youth urgently need to know. Here are the first 41 lessons in that curriculum.

  1. To figure out how much to donate towards your mate’s charity half-marathon, half X OR double Y, where X is the amount paid by their mum and Y is the amount donated by your closest rival, Becky
  2. Don’t mention that it’s snowing
  3. If – for some reason – you talk about bombs in a Facebook message, follow this up with “Hi Theresa May” in case Theresa May is looking, and then Theresa May will think you are just joking
  4. If you are on a train and you are annoyed about the train, do not tweet @ the social media manager who runs the account for the train, because they are not, in fact, the train
  5. If a Facebook meme starts “Only 10 per cent of people can get this puzzle right” – know that lies are its captain
  6. It’s not pronounced me-me
  7. Never say me-me nor meem, for they should not be discussed out loud
  8. People can tell if you’ve watched their Instagram stories
  9. People can’t tell if you’ve waded back through their Zante 2008 album and viewed all 108 photos
  10. People can tell if you’ve waded back through their Zante 2008 album and viewed all 108 photos if you accidentally Like one – in this circumstance, burn yourself alive
  11. Jet fuel can melt steel beams
  12. If a dog-walking photo is taken in the woods and no one uploads it; did it even happen?
  13. Google it before you share it
  14. Know that Khloe Kardashian does not look that way because of a FitTea wrap
  15. Do not seek solace in #MondayMotivation – it is a desolate place
  16. Respect JK Rowling
  17. Please read an article before you comment about a point that the article specifically rebutted in great detail in order to prepare for such comments that alas, inevitably came
  18. Don’t be racist, ok?
  19. Never, under any circumstances, wade into the Facebook comment section under an article about Jeremy Corbyn
  20.  If a dress looks white and gold to some people and black and blue to some others, please just go outside
  21. Open 200 tabs until you are crippled with anxiety. Close none of the tabs
  22. Despite the fact it should make you cringe, “smol puppers” is the purest evolution of language. Respect that
  23. Take selfies, no matter what anyone says
  24. Watch Zoella ironically until the lines of irony blur and you realise that the 20 minutes you immerse yourself into her rose-gold life are the only minutes of peace in your agonising day but also, what’s wrong with her pug? I hope her pug is ok
  25. Nazi Furries are a thing. Avoid
  26. Use Facebook’s birthday reminder to remember that people exist and delete them from your Friends list
  27. When a person you deleted from your Friends list inexplicably comes up to you IRL and says “Why?” pretend that your little cousin Jeff got into your account
  28. Don’t let your little cousin Jeff into your account
  29. “Like” the fact your friend got engaged even if you don’t actually like the fact she is reminding you of the gradual ebbing away of your youth
  30. No one cares about your political opinion and if they act like they do then I regret to inform you, they want to have sex with you
  31. Please don’t leave a banterous comment on your local Nando’s Facebook page, for it is not 2009
  32. Accept that the viral Gods choose you, you do not choose them
  33. Joke about your mental health via a relatable meme that is actually an agonising scream into the void
  34. Share texts from your mum and mock them with internet strangers because even though she pushed you out of her vagina and gave up her entire life to help you thrive as a person, she can’t correctly use emojis
  35. Follow DJ Khaled
  36. Decide that “Best wishes” is too blah and “Sincerely” is too formal and instead sign off your important email with “Happy bonfire night”” even though that is not a thing people say
  37. If someone from primary school adds you as Friend in 15 years, accept them but never speak again
  38. The mute button is God’s greatest gift
  39. Do not tell me a clown will kill me after midnight if I don’t like your comment because that is not a promise you can keep
  40. Don’t steal photos of other people’s pets
  41. Accept that incorrect "your"s and "you’re"s are not going anywhere and save yourself the time 

Amelia Tait is a technology and digital culture writer at the New Statesman.