Password giveawayRecently, word has spread that companies are beginning to ask potential employees to hand over their Facebook passwords, saying it's just another piece of the all-important background check.

Experts say that the requests may be legal. But that's not necessarily what's really worrying Internet companies.

Even if it's A-OK in the legal sphere, the publicity around the idea brings up a topic that companies like Facebook and Google (GOOG) would prefer to avoid: privacy.

In their ideal world, these companies could gather as much user data as possible without creating a backlash against their core products. But we don't live in an ideal world, do we?

Good Luck With That

Facebook has been dealing with this for years. And ironically, it's Facebook's own social network that sounds the alarm and sets off the frenzy whenever privacy issues rear their heads.

Every time the company changes its privacy settings, intrepid users blast their friends with alerts and tell them how to change their settings to protect private information.

Facebook isn't making things easier for itself. The company allows apps to ask for almost any type of information they want. For example, Zynga (ZNGA) wants access to your name, profile picture, gender, friends, and any other public information. They even want to post on my wall on my behalf. If you don't give them the rights to your information, you can't play their games. What's this world coming to?

Google has enjoyed a somewhat easier ride with privacy over the years, but it's beginning to come under attack as well.

With its reach now expanding from search to YouTube to social networks, its privacy policy update allowing its units to access information from anywhere in the Googlesphere shows how far the company is going to use your data. The backlash was just as intense as changes at Facebook generate. The message: This matters to users.

Why It Matters to Companies

The conundrum for Facebook, Google, and any other company that collects your data, is that they use information about you to target goods, services, and advertising. If you "like" Coca-Cola on Facebook, you may find a Coke Zero ad on some of the pages you visit. Scarier yet, if you follow Coca-Cola on Google+, Google can place those ads almost anywhere you go on the Internet, since the company's advertising reach is so wide.

Knowing more about you means more focused ads, and more focused ads mean more revenue for Google and Facebook. It's in their best interest to know as much about you as they can.

Sorry, the Privacy Ship Has Already Sailed

Part of the problem for consumers is how easy it is to allow our information to be taken. Ever read the iTunes agreement, Google privacy policy, or any lengthy end user licensing agreement you can just click "accept" on? Me neither.

Consumers don't even know what they're giving up until they find out from a media report how these companies are using the information, and even then, it's hard to change anything. So when something like the recent password-request issue comes up, it makes the news for a day, maybe two, and then goes away. It's too easy for companies to keep tracking us more and more closely.

And more and more tracking is exactly what they're doing.

Do you even know what's being tracked on your computer, smartphone, or tablet right now? Google recently got in trouble for slipping some tracking code into Apple (AAPL) devices, so you probably don't. There are cookies, widgets, and other thingamabobbers that track all kinds of information about your Internet usage and feed it back to a variety of sources.

Privacy has become so complicated online that it doesn't really exist. Unless you keep information off the web, there are probably ways someone will share it.

How Mad Do You Have to Get?

The industry has been in enough hot water over this topic that it's surprising that a solution to the privacy issue hasn't been found. Maybe there's not enough outrage, or maybe we just don't care. Until we do, Facebook, Google, and other Internet companies are going to squeeze as much information out of you as they can. It's in their best interest to do so.

Motley Fool contributor Travis Hoium does not have a position in any company mentioned. The Motley Fool owns shares of Coca-Cola, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Coca-Cola, Apple, and Google, as well as creating a bull call spread position on Apple.

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24 Comments

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bill

They are just like the credit card companies and banks giving out your private information and then charging to protect your privacy. This is the reason for identity theft and you won't even be aware that somewhere at some time you may have agreed but now things have been altered and it doesn't matter....because you gave your consent. Its always screw the consumer! What happened to the customer is always right? Just asking!

April 02 2012 at 10:27 AM Report abuse rate up rate down Reply
johnlwings

Nobody really NEEDS facebook, myspace, Google, AOL or Yahoo. Smart-phones can be tossed too.
Unless you want the world to know what you are doing and where you are. It is possible to have a computer and be on the Internet, if you must., but then again, I enjoy being invisible on line... pretty much!

April 02 2012 at 4:26 AM Report abuse +1 rate up rate down Reply
mongenbart

go to a public place (like a library), create a fake email account in your own name. Send a few emails to imaginary addresses. Delete the undeliverable messages when they come back. Browse a little and sign up on some wonderful sites with this email. And tell anyone interviewing you for a job that this is your email account and you do not use Facebook. then send the real stuff from your real email account. And post anything you want on Facebook.

April 01 2012 at 9:52 PM Report abuse +1 rate up rate down Reply
alucky1128f8@aol

aol and huffington post suck !!

April 01 2012 at 9:45 PM Report abuse rate up rate down Reply
cybergenios

thats why i never use my real name birthday address work place on any social site or anywhere on the internet and i try to use my ip private with my own codings when browsing internet..............facebook thinks im in uknown place when im on sweet

April 01 2012 at 11:51 AM Report abuse +1 rate up rate down Reply
ZooZoo

If the company can "ask" for your personal information, do you have the right to ask for the personal information of say the CEO, CFO, board of directors (if a public corp), owners, hiring manager, HR department, etc.? In essence you are also interviewing the company when they interview you.

April 01 2012 at 9:54 AM Report abuse +3 rate up rate down Reply
kali4jun

it. is like your store cards too they know what your eating and drinking and how often you go to
the bathroom.

March 31 2012 at 8:40 PM Report abuse +2 rate up rate down Reply
sonjarajkovich

And what if you do not have a Facebook page, or participate in Facebook voluntarily in any way? (I don't have a page, but I can't control whether someone else posts my picture or refers to me on their page. That is their choice, in the end.)

BTW, if anyone asks you for your banking password, beware. Which brings to mind -- what if someone pretends to be an employer, sets up some interviews, and gets a whole bunch of information on a whole bunch of people? Would that be legal, too? Could they pretend to be an employer of one sort, and really be in a different line of business, collect all sorts of information about those who apply, and then sell it? Free enterprise and all . . . it may sound illegal on its face, but is there some way to "structure" something like this and get away with it? You know, with releases containing "fine print?" How do we know for sure that it couldn't be done?

March 31 2012 at 6:34 PM Report abuse +3 rate up rate down Reply
1 reply to sonjarajkovich's comment
Razzal

It does not matter how much fine print they have if they get you to sign under coercion or deception. If someone pretended to be doing job interviews to steal personal information that person would be held accountable for identity theft and fraud no matter how much fine print they stick into a contract.

April 02 2012 at 2:19 AM Report abuse rate up rate down Reply
Freddy De Joint

i hate everything that big brother dstands for, they have no GOD DAMM RIGHT!!!!!!!!!!!!!!!, to any of your personal crap

March 31 2012 at 5:07 PM Report abuse +2 rate up rate down Reply
2 replies to Freddy De Joint's comment
dmfischetti

Then be careful that you don't put it out there. As far as I am concerned if you do online banking, or ever purchased anything online, it is too late.

April 01 2012 at 12:06 PM Report abuse +2 rate up rate down Reply
Razzal

Actually they have every right. Perhaps you should read some of the stuff you agree to or even reread the article because that is what it is about. You give them the right to do just about anything they want with your information when you accept there terms and conditions as long as what they are doing is within the bounds of the law and unfortunately for us it is.

April 02 2012 at 2:20 AM Report abuse rate up rate down Reply
lelandwmckee

The way to protect your privacy if companies are not willing? Shut them down by not using them or any of the products they sponsor. It's really that simple.

March 31 2012 at 1:27 PM Report abuse +2 rate up rate down Reply
1 reply to lelandwmckee's comment
Razzal

Good luck on getting high school and college students to stop using facebook or google. Some of these kids have no lived in any part of their life without them. They would not know what to do if they could not tweet or facebook or google search something. So a boycott is not really an option. Regulations will have to be enacted in order to tighten the security of your private information.

April 02 2012 at 2:22 AM Report abuse rate up rate down Reply