Forbes:
Social network Path has a bit of a problem – they’ve been caught uploading user’s address books to their servers without explicit permission. While it might make finding friends easier for the user, the fact it was ‘hidden’ has not gone down well. They’ve started to roll out an opt-in feature to their photo sharing software on the Android Client, with a similar option due to appear in the iOS.
From the American point of view, it’s a PR issue that requires explaining and a clear message from the team, and to be fair to CEO Dave Morin, he has apologised and explained the next steps.
But there might be a bit more of a headache in the UK. On my reading, Path is in breach of the Data Protection Act. The usual internet caveat of “I am not a lawyer” is in effect, but the plain English notes on the Information Commissioners website on the ‘fair’ use of data stress that the end users must know what is happening. Which is not the case with Path.
Indeed not.
And what goes for Path goes for Facebook, in multuplicate. Getting to
that $15 - 20 ARPU to justify the IPO valuation is going to be far harder than assumed I think.
One to watch....