The social network is proposing these updates as part of a settlement in a US court case relating to advertising, it said in a statement.
The website has revised its two key documents -- Data Use Policy and Statement of Rights and Responsibilities -- to explain how a user's name, profile picture and content may be used in connection with ads or commercial content.
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The earlier policy line, "you can use your privacy settings to limit how your name and profile picture may be associated with commercial..", has been removed.
On the proposed updates, Facebook Chief Privacy Officer, (Policy) Erin Egan said: "We revised our explanation of how things like your name, profile picture and content may be used in connection with ads or commercial content to make it clear that you are granting Facebook permission for this use when you use our services."
Facebook also said that it may use profile photos of users to help their friends tag them in photos.
The proposed Data Use Policy says that choosing to make information public would allow anyone, including people off Facebook, to be be able to see it.
Also, the website would also have information about the computer, mobile phone, or other devices that are used to install Facebook applications. Other information like IP address, mobile phone number, browser and location of the user would also be accessible to the website.
"We may get your GPS or other location information so we can tell you if any of your friends are nearby, or we could request device information to improve how our apps work on your device," says the new policy.
Facebook said that users can review and comment on the proposed updates in the next seven days and it will "carefully consider feedback" before adopting any changes.
The proposed updates came after a US court early this week granted approval to Facebook's $20 million settlement of a lawsuit over its 'Sponsored Story' advertisements.
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