Both Facebook and Google have had their share of embarrassing privacy blunders. Facebook had Beacon, and Google had Buzz. But the most recent privacy scandal to make headlines—surrounding a Gmail feature called Social Circles that pulls in data from users’ friend connections—has become a scandal about botched PR. Facebook, apparently gunning for Google in an area where it doesn’t look so hot itself, reportedly hired PR firm Burson-Marsteller to do its dirty work.

The effort failed when privacy blogger Christopher Soghoian publicly posted the sleazy e-mail pitch he received. In part, the pitch read:

Google is at it again - and this time they are not only violating the personal privacy rights of millions of Americans, they are also infringing on the privacy rules and rights of hundreds of companies ranging from Yelp to Facebook and Twitter to LinkedIn in what appears to be a first in web history: Google is collecting, storing and mining millions of people’s personal information from a number of different online services and sharing it without the knowledge, consent or control of the people involved.

In an interview with Ben Popper at BetaBeat, Soghoian said that Google’s Social Circle is far from his main privacy worry:

I’m a fairly outspoken privacy advocate and there are many things Google does that are really bad on privacy, but this isn’t the thing that is keeping me up at night. It’s something that I had never really worried about.

Soghoian told Popper that companies have recently realized that raising privacy issues is a way to score points against competitors. He continued:

The difference is Microsoft can do it publicly, because they don’t have their own privacy problems. Facebook is no better than Google on these issues, so to make these attacks they have to hide behind these PR companies. If they tried it in public, under their own name, people would laugh in their faces.

Soghoian suggested that USA Today, which was the first news outlet to break the story, narrowly escaped being duped itself. The suggestion is plausible. The article, which leads with information about Burson-Marsteller, shifts to descriptions of users expressing shock about Social Circles:

Dion Moses, 25, a computer engineer in Ridgecrest, Calif., also wants out of Social Circle. “This is shocking,” Moses says. “I had no idea that Google was doing this, and I pay close attention to most technology news sites.”

The only way to disable Social Circle, [Google spokesman] Gaither says, is to stop using Gmail.

I’m not particularly shocked by revelations of the smear campaign, though the details are certainly fascinating. As The Register’s Andrew Orlowski writes sarcastically:

Newspaper readers will be appalled to discover that a blushing, innocent maiden in Silicon Valley has had her reputation besmirched by wicked rival. Facebook’s PR agency attempted to spin a blogger to write an unfavourable story about rival Google.

What’s most important is that this story illustrates what a mess privacy is. Social Circles might indeed be something to worry about—if it weren’t a minor infraction compared to the sorts of things that are happening all the time. Companies have access to huge amounts of users’ personal data, and don’t have to deal with much oversight about what they do with it.

Social-media researcher Danah Boyd summed the situation up well in a piece for TR last year:

Privacy is not simply about controlling access. It’s about understanding a social context, having a sense of how our information is passed around by others, and sharing accordingly. As social media mature, we must rethink how we encode privacy into our systems.