New European Commission rules could curb the way Facebook gathers users’ information, in a move which threatens to undermine the firm’s revenue model.
An EC Directive will be introduced in January to prevent the site from harvesting information posted on the social networking site by users and passing these details on to advertisers unless users specifically allow it, according to The Telegraph.
The news follows reports that Facebook is planning an IPO next year. But if the rules go ahead it could cast fresh doubts on whether the company will be able to turn a profit for investors.
Viviane Reding, the vice president of EC, told the newspaper: "I call on service providers –especially social media sites – to be more transparent about how they operate. Users must know what data is collected and further processed (and) for what purposes.
"Consumers in Europe should see their data strongly protected, regardless of the EU country they live in and regardless of the country in which companies which process their personal data are established."
Facebook has denied that it passes on messages and chats sent through the site to advertisers. "Adverts are personalised to the individual user. We do not track peoples' behaviour to serve advertising,” said a spokesman.