On the day that Facebook announces new privacy settings amid almost instantaneous Web-wide reactions, we wanted to go over, in one all-encompassing post, the issues that led us to this point.

The thing is, there was already a notorious precedent, and the world’s foremost social networking site had been collecting plenty of negative press even before the current re-emergence of privacy as the paramount issue. Just recently in the UK, for example, the Child Exploitation and Online Protection Centre (CEOP) had attempted, unsuccessfully, to persuade Facebook to include on all of its pages, in the interests of child safety online, a clearly visible “panic button” that links directly to CEOP. Instead, Facebook met them halfway, by retooling its safety info center.

So far so (reasonably) good.

But nothing prepared them for the raging firestorm that seemed to build so suddenly regarding the privacy issues. Now strictly, this story is slightly outside the purview of this blog, affecting as it does pretty much everyone and not just youth, but it can’t hurt for adults reading this blog to have at least some inkling of both the issues and the timeline that led us to this point. To that end, I heartily recommend exploring most if not all the embedded links herein.

In November/December, 2009, Facebook adopted a new privacy policy that changed the privacy status of users’ information — as a concrete example, your “list of friends”, however restricted previously, was now automatically “publicly available”, with no privacy settings. Valiant (as well as illuminating) attempts to explain the issue in terms the average user could grasp sprang up. Since the New Year, the discontent rumbled along ominously, finally erupting all over the place. This was no longer just a gearhead issue; 400 million people were potentially affected. Here was Gawker‘s early take, in what it termed Facebook’s Great Betrayal:

Facebook’s business rationale here is clear. Rival Silicon Valley startup Twitter has grown extremely quickly in the last few years, almost entirely on the back of public content — from celebrities, people’s friends and users’ professional colleagues. That has brought traffic, money from search engines and a $1 billion valuation.

Facebook wants in on that kind of growth, and more public content means more traffic. But Facebook has historically been one of the most private of the social networks, functioning as a sort of safe alcove amid the chaos of MySpace and Friendster.

When you add the recent security issues (in which users’ email addresses, IP addresses and chat logs were exposed) to that of privacy, you get a sense of why the backlash has been so fierce. And believe me, it’s been fierce. Try this for size:

We’ve fought for years to create an open web, and we would be crazy to give our future over to a selfish little kid who has no problem stealing any innovation he catches from the corner of his eye from other entrepreneurs.

Didn’t anyone read “Tom Sawyer”? We’re whitewashing [Facebook founder and CEO Mark] Zuckerberg’s fence.

People are creating fan pages on Facebook and then paying Facebook to send them traffic. Let me explain this one more time: You’re PAYING Mark Zuckerberg money to send traffic to HIS SITE. Think about it.

Oh yeah, and while he’s taking your money and page views, he’s convincing everyone that they don’t need their own customer’s information: Just use Facebook Connect!

Oh yeah, and if you’re stupid enough to give up your customer database to Facebook, he will pay you back by screwing over your user’s privacy! Yes, that’s right: give up your customer database, pay for traffic to build Facebook’s page views and, by the way, if you would like to use a virtual currency, Zuck will take 30% of that as well!

Adding insult to injury for many has been the relative silence from Facebook executives. And when the likes of Zuckerberg did speak, they came across as unconcerned and, well, arrogant. Not to mention, plain wrong. Here’s danah boyd:

What startled me was the radio silence from Facebook.

And, in that same blog post, she includes these two Zuckerberg quotes (taken from David Kirkpatrick’s soon-to-be-released The Facebook Effect):

We always thought people would share more if we didn’t let them do whatever they wanted, because it gave them some order.

Having two identities for yourself is an example of a lack of integrity.

Like I said, arrogant and wrong. That sense of wrongness, as intuitively grasped by many users even without a deep grounding in the issues, is perhaps best captured here, a nuanced and thoughtful post that is well worth five minutes of your time. But anyway, here we are, and Facebook has not exactly fallen over itself to apologise, even if today — around six months after the policy change that sparked the controversy — it has finally addressed the privacy issues to some degree.

History lesson over, we’ll see how it now plays out in real time. And speaking of real time, the restless Web never settles, and perhaps none of this will end up mattering at all.

[Update May 27th, 2010: Canada's Privacy Commissioner is still not happy with Facebook.]