At the end of last year Facebook changed its default privacy settings, allowing profile information to be shared with the wider web, unless users specifically opted out. Last month it moved a step further, opening up Facebook data to third-party websites, described by founder Mark Zuckerberg as a move towards "a web where the default is social".
While Facebook sold the idea as a way to offer a more personalised surfing experience, critics were concerned that users were losing control over their information.
It prompted a letter from the European Commission saying changes to its privacy settings were "unacceptable". The move caused outrage among some users, who have organised a "Quit Facebook" day, scheduled for May 31.
Last week Facebook held an internal meeting to deal with the crisis, which has already seen some high-profile users deactivate their Facebook accounts.
Since the changes were introduced in December, more than 50% of users have changed their privacy settings, Facebook said in a statement to BBC News.
Its current privacy policy has 50 different settings and 170 options and runs to 5,830 words, making it longer than the US Constitution. Alternatives to Facebook are springing up, including open source social network Diaspora.
Designed by four students from New York University, the project has quickly gained thousands of backers and received $125,000 in donations to help get it off the ground.
In separate news, Facebook has launched a site designed to increase its footprint in the developing world. 0.facebook.com is a mobile site that includes all the social network's key features but is offered with no data charges.
It will be available through 50 mobile operators in 45 countries.
