An Australian court has imposed a fine of A$20 million (approximately $14 million) on Meta Platforms, the parent company of Facebook, for unlawfully collecting user data via a smartphone application that was marketed as a tool for enhancing privacy without adequate transparency about its data handling practices.
The Federal Court of Australia also mandated that Meta, along with its subsidiaries Facebook Israel and the now-defunct app Onavo, pay A$400,000 (about Rs. 2.2 crore) in legal costs to the Australian Competition and Consumer Commission (ACCC), which initiated the civil suit.
This penalty addresses one aspect of Meta’s ongoing legal challenges in Australia regarding its management of user data, which gained significant public scrutiny following the Cambridge Analytica scandal associated with the 2016 U.S. election.
In addition to this ruling, Meta is currently facing another civil action initiated by Australia’s Office of the Information Commissioner concerning its connections with Cambridge Analytica within Australia.
The court’s ruling specifically pertains to the virtual private network (VPN) service, Onavo, which Meta provided as Facebook from early 2016 until late 2017, promoting it as a means to safeguard personal information. VPN services are intended to mask an internet user’s identity by assigning an alternative online address to their device.
However, it was revealed that Facebook utilized Onavo to gather extensive data on users, including their location, frequency of app usage, and the websites they frequented, for the company’s advertising objectives, as noted by Judge Wendy Abraham in her ruling.
In her written judgment, Judge Abraham remarked, “The failure to make sufficient disclosures … may have deprived tens of thousands of Australian consumers of the opportunity to make an informed choice about the collection and use of their data before downloading and/or using Onavo Protect.”
She emphasized that the court could have levied fines amounting to hundreds of billions of dollars, considering that the app was downloaded 271,220 times and each violation of consumer law could warrant a fine of A$1.1 million (around Rs. 6.07 crore). However, she classified the violations as part of a single ongoing conduct.
The fine, though negotiated by both parties, was deemed substantial enough to ensure that it is not regarded merely as an acceptable cost of doing business, according to the judge.
In a statement, Meta highlighted that the judge recognized the company did not intend to mislead customers and emphasized that, “over the last several years we have built tools to give people more transparency and control over how their data is used.”
The ACCC has not yet provided comments on the ruling.
© Thomson Reuters 2023
