Although Facebook has made it easier to edit, you should still make the assumption that, unless you specifically edit the privacy options, you are probably sharing everything you say, post and comment on with the entire world. Certainly this is so if you accept the Facebook default privacy settings. Even if you limit everything to share only with your friends (which is what I recommend), there are still many things you just can’t control.
For example, while Facebook allegedly allows you to turn off the “instant personalization” feature that allows partner sites like Yelp and Pandora to gain access to personal data, there may still be the equivalent of “community pages” that automatically link to some personal data, like your hometown or college, to topic pages for that town or school. That’s a proprietary algorithm that can’t be edited. And anything you share on a friend’s page, where you can’t control their privacy settings, will allow it to be shared further, and cannot ever be taken back, even if you remove the post from your own site.
UPDATE: The Facebook changes introduced in September 2011, called “real-time sharing” take away even more privacy. For many music, TV shows and Hulu, games, news and other sites that you log in with your Facebook identity, that information will automatically be shared to and by Facebook. Facebook calls this “frictionless sharing”. is the company's new permissions protocol, which says that apps only need initial approval to post activities on your behalf. Once you install the app and authorize it to post stories on your profile and news feed, it'll never ask for your permission again. So, if you’re a closet Barry Manilow or Glee or Scrabble fan, everyone will know it. This is obviously good for Facebook and its app makers, as they’ll collect more and more data about your likes and dislikes and track you across the web. Other than creating a database of your travels, what does it do for you, though? And, because there is no “like” button to click if you listen to a song through Facebook, it’s automatic, you have no choice. Moreover, with Facebook’s Open Graph, app activities will now appear in the News Feed, Ticker, and on your Facebook profile. Facebook does this because they hope that by sharing your activity everywhere, your friends will be more likely to install apps you're using, further helping brands increase awareness. To protect yourself, your highest level of security against oversharing will be audience selection: You do have the opportunity to select an audience with which to share your activity upon the initial installation of an app (In the drop-down list, under "Custom" your friend lists are displayed). Finally, you can always revoke an app's permissions by going to the App Settings page and clicking the "X" next to the app to delete it, or click "Edit" to change the audience selection.
UPDATE: BUT THEY JUST CAN’T HELP THEMSELVES: In December, 2010, Facebook introduced face recognition software (called Tag Suggestions) on every one of the 500 million users accounts (some 20 billion photos, adding 100 million tags each day). Facebook’s biometrics for each photo allow photo recognition the same as that used by law enforcement, which used the software to pick up 19 “criminals” at last year’s SuperBowl. Remember, with FaceBook, you’re “opted in” to new features unless you specifically “opt out.” And don’t forget that once you “tag” information on Facebook, it stays on-line (not just on your own computer, like iPhoto) and it stays on-line forever. In June, 2011, U.S. privacy groups filed complaint with the FTC claiming violation of users’ privacy as well as the European Union. Same for Google. In Europe, at least, in late 2012, Facebook no longer makes the photograph tag facial recognition tool available to new users, and will discontinue the old one as of October 15, 2012. See, Facial Recognition. In October, 2012 Facebook “confirmed scanning users’ private messages for shared links to web pages with Like buttons, so it can increase the number of corresponding Likes for those pages” (although this only affects social plug-ins off of Facebook and not Facebook likes themselves.) On the positive side, one of my clients suggested that the feature (when opted-in) could be used at airports to identify you and speed you through the check-in process. Compare “facial detection” which perceives human faces but does not identify them with “facial recognition” which does identify individuals. Facial recognition is poised to democratize surveillance, heralding the end of anonymity. Immersive labs, a NY company, has developed software for digital billboards using cameras to gauge the age range of its viewers; SceneTap, a Chicago company, uses cameras with face detection software to scout local bars, reporting ratios of men to women and other data. In 2012 Facebook quietly switched your default e-mail address to a facebook.com extension. And it also unveiled what’s been called a “stalking app” (a/k/a “Find Friends Nearby”) which can alert you to the presence of other Facebook users physically near you. You can imagine the nefarious uses this feature can be put to. Finally, the day before Thanksgiving, 2012, Facebook announced the discontinuation of “voting”. Since 2009, users had the right to vote on major changes by Facebook. If 7,000 people commented on a proposal, it would trigger a vote, and if 30% of users voted against the proposed change, Facebook would abandon it. Now, Facebook claims (a la China) that it’s too big for democracy and will abandon voting. You can still give feedback, but it’s useless. But by repealing Facebook Sufferage, it is removing a fundamental Facebook norm, that its members are citizens in a common community, not just numbers. This isn’t exactly a privacy issue, but it is a restriction of fundamental rights.
UPDATE: On 12/12/12, in addition to the discontinuation of voting, Facebook announced new privacy features: A “request and removal” tool which removes photos from a site entirely, not just tags; More specific app permissions; a privacy icon on the blue toolbar that takes users to the site’s most common privacy tweaks; and an expanded activity log that lets users more easily see information that may have been removed from Timeline but still appear elsewhere on Facebook. It’ll still be difficult to control all of the information on your account that can be viewed by literally millions of users, but it’s a start. This “personal tracking” works even if you’re not using the phone, so long as it can be pinged by the Wi-Fi.
And, in February, 2013, Facebook announced that is almost finished developing a smartphone app to be released mid-March which would allow users to track each other, even when the phone is turned off. This isn’t new.
UPDATE: In 2014 Facebook again modified it’s method for enabling some privacy settings when it gave users the choice of audience for every post (i.e. Public, Friends, Friends except Acquaintances, Only Me or Custom). It’s a good idea, but beware that whatever the last post you made, it automatically assumes that you want it set that way for all future posts. So, if you shared a post publicly, you have to re-set it back to friends for the next post, or else you’ll be going public forever. Moreover, you’ve got to be careful not to comment on a public post, otherwise your comment will go public as well. [To determine if the post if public, look for the icon next to the time of the post - a globe means it’s public, a silhouettes mean it’s for friends only.] Photos can be another problem: If they’re posted by someone who took the photo, even though you can untag it on your own profile page, it won’t remove it from the photographer’s page unless they take it off. Theoretically, Facebook may be able to do so if you click on Report/Remove Tag on the photo itself, but by the time they do that, it may have been recopied thousands of times.
Also in 2014, Facebook also introduced what the New York Times dubbed the the “Zuckasaurus,” a friendly little blue dinosaur (see right) which prompts users to review or set their privacy settings throughout the site.
GOOGLE PRIVACY POLICIES: CLICK HERE FOR MORE.