Canada's privacy commissioner said that online social networking site Facebook breaches the law by keeping users' personal information indefinitely after members close their accounts.

Privacy Commissioner Jennifer Stoddart released a report that also accuses Facebook of disclosing users' personal information to the almost one million third-party developers around the globe who create Facebook applications such as games and quizzes.

The popular website, used by 12 million Canadians, lacks proper safeguards to prevent these developers from seeing users' profile information, said assistant privacy commissioner Elizabeth Denham in the report.

Privacy has been a central, often thorny issue for Facebook because so many people use it to share personal information with their friends and family. As the five-year-old social networking service has expanded its user base and added features, its privacy controls have grown increasingly complicated.

The Palo Alto, California-based company said earlier this month that it was overhauling its privacy controls in an attempt to simplify its users' ability to control who sees the information they share on the site.

To make the settings easier, Facebook said it would consolidate its existing six privacy pages and more than 30 settings onto a single privacy page. It will also standardise the options for each setting so the choices are always the same, something that hasn't always been the case.

"It's clear that privacy issues are top of mind for Facebook, and yet we found serious privacy gaps in the way the site operates," Stoddart said in a statement, adding that understanding Facebook features can be confusing.

For example, the "account settings" page describes how to deactivate accounts but not how to remove personal data from Facebook's computer servers. She wants Facebook to remove personal data in deactivated accounts after a reasonable length of time.

Stoddart calls for more transparency to ensure the site's Canadian users have the information they need to make decisions about how widely they share personal information.

The privacy commissioner will review Facebook's actions after 30 days to gauge progress. She can take the case to the Federal Court of Canada to have her recommendations enforced.

Facebook declined interview requests, but issued a statement reiterating it was working on new privacy features that it believes "will keep the site at the forefront of user privacy and address any remaining concerns the commission may have." It added that in the meantime, it will continue to work with the commissioner's office and to raise awareness about its privacy controls.

The privacy commissioner launched the probe of Facebook in response to a complaint last year from the Canadian internet Policy and Public Interest Clinic.

The legal clinic at the University of Ottawa, focused on maintaining balanced Canadian policies regarding technology, cited numerous violations by the high-profile website.

Facebook said that 250 million people around the world are now using the site.