One of the more interesting features within the new Facebook dashboards is the ability to see which applications and games the people in your friend list have been using. Although this is a great way to discover new apps, there were privacy concerns around having so much information visible to friends automatically.

Facebook took the first step to address this last week with the introduction of a privacy control at the developer level. Now, application developers can decide whether their app or game will appear in a user’s friends dashboards or not. This is useful for application types that a developer thinks a user might avoid if their friends knew they were using it. However, it doesn’t provide privacy options to the users themselves.

Since last week, Facebook has added a new privacy control on the user application privacy settings page (accessed from the new “Account” dropdown at the top right of the page and clicking on “Applications and Websites”) that lets the user do just that. There, you can see a new option for controlling “Activity on applications and games dashboards”, shown below:

The control gives users a number of options as to who will be able to see their application activity. The choices are similar to those that control status update and other wall visibility: “Everyone”, “Friends and networks”, “Friends of friends” or “Only friends”. Obviously, Facebook prefers that everyone shares information at least with their friend network.

Click on the “Customize” option, though, and a dialogue box appears with the ability to restrict the information to certain friends (or to hide it from specified friends), networks, or for maximum privacy: “Only me”. This effectively gives the user the ability to hide all of their application activity from their friends.

Although it doesn’t provide the ability to hide only particular applications, this does provide a way for those users who are most sensitive about the apps and games they interact with to hide their activity. However, we doubt a large number of users will end up setting this option.