It seems that Facebook may or may not have hired former Bush Administration Federal Trade Commission Chairman Timothy Muris to help the company deal with impending regulatory changes.  The truth is, it matters very little.

In fact, the noise about Muris’ joining Facebook and his resume is misdirection. So, too, is the point — assumed but quite logical — that his hiring is all about brokering a deal with the FTC.

A sharper point is the uneasy state of Facebook’s relationship with its users. The catalog of actions that have brought the company to this “point” are well-known. What ought to come next, though, is more than hiring a “fixer” or cutting a deal with regulators. Until Facebook makes privacy an understood and essential aspect of customer service, it will look like any other self-interested company seeking to protect a market, not the rising tide it fancies itself, lifing all boats.

Privacy is not a standard (set by law or regulation) that needs to be met.  Instead, it is a negotiation between customers and the companies with whom they do business.  Just like return policies and direct marketing and affinity clubs, privacy must be formed to support the relationship; clear in each moment, but flexible to respond to changed circumstances.

Facebook is an essential part of its users’ days.  Mr. Muris’ job status makes little difference as to whether 400 million users become 4 billion or 4 million.  That is up to Facebook.

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At the round tables on privacy held by the Federal Trade Commission, Indiana University law school professor and member of the board of The Privacy Projects, Fred Cate said out loud what long has been silently known about consumer protections based on the notices web sites post to describe their data protection practices and the consumers’ choice to click on or away. Cate said: “Choice is an illusion.”

There is more than a bit of substance behind the bumper sticker.  “The flurry of notices may give individuals some illusion of enhanced privacy, but the reality is far different. The result is the worst of all worlds: privacy protection is not enhanced, individuals and businesses pay the cost of bureaucratic laws, and we have become so enamored with notice and choice that we have failed to develop better alternatives.”

FTC Chairman Jon Liebowitz offered a more basic indictment of “notice-and-choice.”  More than the length or legalese of the written notice, more than the specific liberties they allow, more even than their non-standard  placement, he says “consumers don’t read privacy policies…”

None of this would pose a problem if the cost of violating a consumer’s sense of privacy did not result is real penalties.  It does.  Just ask Facebook.  Or Google.

Charting a new course with more teeth without raising the stakes of consumer participation and offering companies a “safe harbor” will take some doing.  One way may be to focus on encouraging corporate accountability and requiring a specific outcome.  Rather than dictate specific behavior — collect this, not that, hold it for a month or a quarter, require an opt-in or opt-out — government can require outcomes that can be monitored and enforced.  A breach is best prevented by companies focused on customer loyalty, not government guidelines.

While it is best to act online as if you are in public, each of us leaves a mandatory trail of data as we go from one digital public square to the next. The current ability to collect, analyze and link what in an earlier day was dust on our sandals makes the burden of privacy more than our own. If the companies from whom we buy do not buy that, we ought to go elsewhere.

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