Facebook owner fined for misleading users over data collection

Two subsidiaries of Facebook owner Meta have been fined $20 million for collecting user data through a privacy-focused app without proper disclosure information would be used for market research.

Australia's Federal Court on Wednesday found Facebook Israel and Onavo Inc had failed to adequately inform users their data would be used for commercial benefit.

Onavo Protect was a free VPN service app advertised as a way to keep user data protected. The ACCC said the app had been downloaded more than 270,000 times in Australia.

The two subsidiaries were fined $10 million each, and Meta was ordered to pay the ACCC’s $400,000 legal bill.

While information on data use was included in the app’s terms of service, the ACCC argued this was not prominent enough for consumers to understand how their data would be used.

ACCC chairwoman Gina Cass-Gottlieb said information should be clear so consumers could choose what happened to their data.

“We took this case knowing that many consumers are concerned about how their data is captured, stored and used by digital platforms,” she said.

“In the case of the Onavo Protect app, we were concerned that consumers seeking to protect their privacy through a virtual private network were not clearly told that in downloading and using this app they were actually facilitating the use of their data for Meta’s commercial benefit.”

Federal Court Justice Wendy Abraham said Facebook had used Onavo to collect users’ location, time and frequency using apps and websites to assist its advertising efforts.

Justice Abraham said the maximum penalty for the breach was more than $145 billion – $1.1 million for each instance.

Both companies accepted their actions were in breach of Australia’s Competition and Consumer Act 2021.

Meta said in a statement the ACCC acknowledged there was no deliberate attempt to mislead customers.

The app was removed from stores in 2019.