By Maggie Shiels
Technology Reporter, BBC News, Silicon Valley
Mark Zuckerberg said the new policy will be a "substantial revision"
The row over Facebook's change in its terms of service governing users personal data highlights the need for a privacy law, claims a leading watchdog.
The Electronic Privacy Information Centre was on the brink of filing a legal complaint when Facebook announced it would revert to its old policy.
The new terms seemingly gave Facebook vast control over users' content.
"This row underlines the need for comprehensive privacy laws," said Epic's president Marc Rotenberg.
"It is great that Facebook has responded by going back to its old terms of service. That is a step in the right direction, but these issues don't go away.
"It's going to be an ongoing concern for users until we get privacy laws in place," Mr Rotenberg told the BBC.
Epic, along with 12 other consumer and civil liberty groups, were intending to file a complaint with the Federal Trade Commission about the policy changes when it was stopped in its tracks.
"We got a call late last night from Facebook and they said that they were thinking of going back to their original terms of service," said Mr Rotenberg.
Countless Facebook users cancelled their accounts following the changes
"We said that if they would agree to do that, we wouldn't see the need to file the complaint."
In a blog post, Facebook founder Mark Zuckerberg wrote: "Over the past few days, we have received a lot of feedback about the new terms we posted two weeks ago.
Mr Zuckerberg said Facebook would draw up a new document in conjunction with its users. The company has set up a special group called "Facebook Bill of Rights and Responsibilities" to let users have their say.
The group had more than 55,000 members just a few hours after its creation.
"Overarching and scary"
Originally Facebook's founder Mark Zuckerberg defended the changes, unveiled on 4 February noting they were to "better reflect how users used the site."
He had said they were made to ensure that if a user deleted his or her account, any comments he or she had left on a friend's Facebook page would not also disappear.
Tens of thousands of users voiced their anger at the changes
That was not how they were interpreted.
Over the weekend, a popular consumer advocacy blog, The Consumerist , raised alarm bells over the issue.
It defined the changes as meaning "anything you upload to Facebook can be used by Facebook in any way they deem fit, forever, no matter what you do later".
Users took notice and created Facebook groups to oppose the changes. One of the biggest, "People Against the New Terms of Service" grew to over 90,000 in a matter of days.
Group founder Julius Harper Jr of Los Angeles hypothesised that if Facebook wanted to it could take his photographs and "I could see my face on the side of a bus and there would be no recourse to complain".
Such situations were never intended said Facebook spokesman Barry Schnitt.
"Facebook does not, nor have we ever, claimed ownership over people's content. Your content belongs to you," he stressed.
The issue has raised concerns over who does own personal material, from photos to videos to comments stored on a social networking site.
Facebook is the world's biggest with 175 million users.
The Electronic Privacy Information Centre had planned to file a complaint
"This just reflects the ongoing process of people trying to figure out the internet," John Byrne, a senior analyst at Technology Business Research Inc. told Computerworld.com.
"The lesson that should be learned is that these content sites are not your own personal diaries. Consider it more as publishing and less about your personal circle of friends. People need to wake up," suggested Mr Byrne.
Simon Davies of Privacy International criticised Facebook for allowing commercial and legal concerns to override its commitment to users.
"It appears to be going down the same road as Google. Its halo is beginning to slip," Mr Davies told the BBC.
He advised users to "ratchet their privacy settings up to the maximum" to restrict advertisers' access to their data and ensure that their details are fully protected.
Back in 2007, Facebook faced a firestorm of criticism when it introduced a service called Beacon. Users were concerned Facebook would provide advertisers with too much of their information.
Mr Rotenberg said Facebook is not alone in trying to juggle the needs of users with the need to make money.
"There is always a tug of war over users' data."
However Mr Rotenberg said he was impressed with the speed in which Facebook acted and hoped such willingness to listen will continue.
"Mark Zuckerberg said users should be able to own and control their information. If everyone starts with that principle we can end up in a very good place. On a lot of these issues where there is confusion on that point, I see a lot of debate."