Facebook announced sweeping changes to its privacy policy on Thursday, after facing threats of legal action from Canada’s privacy commissioner.

Facebook, the social networking site, agreed to limit the amount of data that third-party applications would be automatically granted, in order to clarify the terms around the storage of personal data and to refrain from storing e-mail addresses of people who were invited to join the site but did not sign up. The changes will take Facebook a year to implement.

“We’re satisfied that, with these changes, Facebook is on the way to meeting the requirements of Canada’s privacy law,” said Jennifer Stoddart, privacy commissioner of Canada. “The privacy of people using the site – not only in Canada, but around the world – will be far better protected.”

The changes are meant to appease Facebook’s critics, who are increasingly concerned about the exposure of users’ personal data on the fast-growing service. These concerns have sparked several lawsuits, though none has yet gained traction in court.

At the same time, Facebook is encouraging users to make more of their information publicly available as it seeks to compete with Twitter and serve as a real-time search engine.

Though the changes stem from concerns in Canada, where 12m people – or one-third of the population – uses Facebook, they will apply to the service’s more than 250m users worldwide.

“The protection of personal information is a global issue,” said Ms Stoddart. “Our personal information is now constantly circling the planet.

“In this case, we had a social networking site based in another country collecting and using the personal information of Canadians in a way that was not in compliance with Canadian laws.”

The most obvious change will occur on Facebook’s platform, where users interact with thousands of games and quizzes developed by third-party applications. Facebook will soon require such applications to specify which types of information they wish to access and “obtain express consent from the user before any data is shared,” the company said. “In addition, the user will also have to specifically approve any access to their friends’ information, which would still be subject to the friend’s privacy and application settings.”

Ms Stoddart said that, while she was pleased with Facebook’s response to her office’s concerns, she was still looking into the privacy controls around other social networking sites.