Time and time again Facebook has rewritten it's own user privacy policies, with each subsequent change releasing more private information into the public domain. (Check out this great pictograph highlighting the changes.)
In the wake of the most recent changes, fifteen consumer protection groups filed a complaint against Facebook with the Federal Trade Commission, accusing Facebook of unfair and deceptive trade practices and violating consumer protection laws.
For it's part, Facebook says its done nothing wrong. Analysis may prove that Facebook hasn't broken the law, but there's no question that the expectation of privacy that users once had when using the service has been eroded significantly with little recourse for users, with Facebook retaining your data even if you delete it from the site.
Yes, you read that right. Facebook continues to hold user data even if you delete it.
The backlash against Facebook seems to be building. It will be interesting to see if Facebook chooses to protect user privacy before a strong competitor can emerge.