One of the most critical decisions that must be made regarding products is what the privacy policy should be and how it must be implemented
. This has always been important in the past, but it will become even more critical in the future. Product managers who dont pay attention to this risk losing their jobs or even ending their careers.
If you watch companies like FaceBook and Google their decisions about privacy are clearly not driven by input from customers. Google turning on Buzz intentionally on all Gmail accounts was a horrendous mistake and they received a lot of negative press (though it seemed to get past most of their users). Facebooks moves have been even worse turning on information sharing with other websites and other moves have led to a mass revolt. Recently there have been articles about how to delete your facebook account, there is a Quit Facebook day being organized and the New York times published an article and graphic showing just how confusing their privacy is.
My personal opinion is that Google and Facebook dont have the best interests of their users in mind when they make these decisions, but rather are more interested in increasing their company valuations. Since their services are free they dont really view users as customers. In a world where users can quit or switch in less than a minute (remember Friendster?) we could see the opposite happen and watch the largest drops in company valuations in history.
So what do you do if you are the product manager for a product that has privacy and security risks? My recommendation would be that you always take the most conservative approach for any default settings and that you insist in your requirements that the settings be very straightforward and easy to turn off. If there are critical decisions get your customers involved to get their opinions. And if your management or team are adamant about taking a risk bring them proof if customers are going to get upset (a video of a few customers reacting negatively will do wonders to help change opinions.)