David Henderson makes the crucial point about privacy concerns about Facebook versus government agencies:
[Blog commenter] figleaf is right that FB is contemptuous of privacy. I'm not sure that the U.S. Census Bureau is less contemptuous. Its handing over Census data to the Secret Service so the federal government could round up Japanese Americans and imprison them was pretty contemptuous of privacy, to put it mildly.
But let's grant, for the sake of this discussion, that FB is quite contemptuous of privacy and that the Census Bureau is less so. Here's the difference. Every single person who signs up with Facebook does so voluntarily. If FB had committed to guarding your privacy, then it would be breeching a contract by doing so. But I've never seen FB make that commitment.
The U.S. Census Bureau, by contrast, uses the threat of force to get its information. That's a pretty big difference. It's not one that I would expect, say, the New York Times, to point out. But it is a distinction that I would have expected from someone who calls himself a bleeding heart libertarian.
This is why I don't care very much about sites like Facebook collecting my data, but care very much about the government doing so, and can't stand the privacy brigade's calls for the government to regulate how websites use your data.
The double irony is that, as Henderson notes, governments (even democratic ones) have a terrible track-record of abusing their people the more they know about them. Whether by incompetence (government agencies reported 445 data losses between 2007-2010, compared to 288 in the private sector) or malice (Henderson's internment example), the government is the last organization I want to know about me.
This should be straightforward enough, but it hasn't stopped the snowball of government moves to regulate major web firms like Facebook and Google. There's this idea that people have a "right" to use social networking websites, so the government is entitled to impose certain standards on them. That mindset implies that the people at Facebook and Google are obliged to get up and work for you and that, if you don't like the terms they offer in exchange for you using their website, you have the right to appeal to state coercion to get your way. That socialist mindset should be long dead.
Unlike government, which is fundamentally coercive, nobody sticks a gun to your head and forces you to sign up. Unless people want to go down the path of seeing others as slaves to be pushed around by the government, they need to accept that contracts and mutual exchange are what should govern conduct between adults, not state diktat.