Facebook has been accused of gathering information about social networkers' online activities before asking their permission using its controversial Beacon software.

The social networking site is now facing legal action after it was allegeded that Facebook, along with Blockbuster, Fandango and Overstock violated online privacy and computer fraud laws.

Beacon shares information about Facebook users' internet activities with friends. For example, when a Facebook user who has Beacon turned on buys an item on Overstock.com, a message appears on their Facebook page about the purchase, and all the user's friends can see it. However, the system evoked concerns from privacy groups who wanted to know how much information Facebook was gathering about how many internet users.

"By the time any user was notified that Facebook was (at a minimum), an observing party to the transaction, and that Facebook was asking for an approval to publicly broadcast identifying information regarding the event, personally identifying information had already been communicated to Facebook," the lawsuit says.

In addition, the program was initially set up as an opt-out system, but it was very cumbersome to do so, the suit alleges. Facebook users had to visit each Beacon affiliate website, of which there were initially 44, and opt out of the program on each site.

Beacon also collected information about all visitors, not just Facebook users, who conducted certain activities on the third-party sites that were part of the program, according to the suit. For example, any time someone bought or rented a movie or placed a movie in their queue on Blockbuster.com, a notification about the activity was sent to Facebook. That happened regardless of whether the person using the Blockbuster site was a Facebook customer.

"Thus, non-Facebook persons who utilised the Facebook Beacon Activated Affiliate websites were not told that their transaction, and indeed, every transaction they engaged in upon the website was being communicated to a third party (Facebook) with whom they had no relationship whatsoever," the suit reads.

In December 2007, Facebook charged Beacon so it became an opt-in system and users could turn it off completely.

A Facebook spokesman said the company had not yet been served the lawsuit but planned to review it closely when it receives it.

The suit asks the court to require Facebook and the other affiliate sites to delete any of the data they collected without user knowledge, award restitution to class members and return any "ill-gotten gains" from the activities that allegedly violated privacy and fraud laws.

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