Facebook will now use personal information gathered from your activities elsewhere on the web to more precisely target advertisements on the social network.
Given Facebook's extensive reach around the globe, the development has alarmed privacy advocates who are asking US regulators review the matter.
In an effort to quiet concerns, Facebook said it would let users see why certain ads pop up in their News Feeds, similar to what Google does. Users can then add or remove an interest to make the ads more relevant.
Facebook made the announcement in a blog post on Thursday.
With its "like" buttons on websites across the web, Facebook has been able to keep tabs on what its 1.3 billion users are doing. But this is the first time the company will use people's browsing history to target ads on its service.
The company is looking to ramp up revenue as it competes with Google for ad dollars.
Facebook said users have asked to see ads that are more relevant to them.
"Let's say that you're thinking about buying a new TV, and you start researching TVs on the web and in mobile apps. We may show you ads for deals on a TV to help you get the best price or other brands to consider. And because we think you're interested in electronics, we may show you ads for other electronics in the future, like speakers or a game console to go with your new TV," the company said.
But, if you are not interested in a new TV, a tool that you can click on each ad will explain why you are seeing the ad and all you to make changes, Facebook said.
Giving people the opportunity to fine tune their personal information and see more relevant ads could also boost Facebook's ad sales.
But most US online consumers don't want to trade their personal data for more relevant ads, according to a recent survey by Consumer Reports.
The survey found 76% of consumers said it was of little or no value to them that ads on the websites they visit or in the apps they use show products and services that match their interests.
For years, Facebook has dealt with qualms over how it handles the hoard of personal information it keeps on users. That concern has come to the attention of regulators.
In 2012, it settled charges with the US Federal Trade Commission that it had deceived consumers. Under the settlement, Facebook is required to get the consent of users before making changes to its privacy settings. It's also subject to 20 years of independent privacy audits.
"Allowing companies subject to legal orders to disregard their privacy commitments to consumers must end," said Marc Rotenberg, executive director of the Electronic Privacy Information Center.