Until now, Google has allowed its users to transfer data, including their contacts, to other websites. For Facebook, this means new users can find out whether their Gmail contacts also have Facebook accounts simply by typing in their Gmail username and password as part of the Facebook signup process. The Terms of Service change, however, means that websites which access Google Contacts will need to offer access to their data to Google too. Since Facebook doesn't do that, it appears that users will soon no longer be able to import their Google Contacts into the site.
Facebook is still allowing its users to import contact information from Google. Right now, only the rules have changed, but we're willing to bet that Mountain View will end up simply blocking Palo Alto from accessing its data if it doesn't get what it wants.
Facebook has never allowed users to export their contact information; the social networking giant recently launched a Facebook data download feature that gives you a list of contact names, but that's it. Facebook likely doesn't want to allow sharing contact information for two reasons. First of all, it wants to avoid another privacy fiasco. Secondly, it wants to continue to dominate the social scene on the Web.
We understand why Google expects data reciprocity, but the way it is going about it isn't likely to be very successful. The fact is that Facebook's social graph is much more valuable than Google's. Usually, when two major Web companies get competitive, the consumer wins. So far, however, this approach seems like it won't do users any good.