A court in Australia fined Facebook’s parent company Meta Platforms (META.O) A$20 million ($14 million) for secretly gathering user data through a smartphone app that was marketed as a privacy protector.
Moreover, the Australian Federal Court ordered Meta to pay A$400,000 in legal expenses to the Australian Competition and Consumer Commission (ACCC), the plaintiff in the civil complaint, through its subsidiaries Facebook Israel and the since-discontinued app Onavo.
Since a worldwide crisis broke out over its use of data analytics company Cambridge Analytica in the 2016 U.S. election, Meta has faced legal difficulties in Australia relating to its treatment of user information. The fine closes one of those threads.
The Australian Office of the Information Commissioner is still pursuing a legal lawsuit against Meta for its interactions with Cambridge Analytica in Australia.
The decision made on Wednesday concerned a virtual private network (VPN) service named Onavo that the business that was then known as Facebook provided from early 2016 to late 2017. Onavo was promoted as a solution to protect user data. By assigning a separate Internet address to their computer, VPNs mask an internet user’s identity.
However, Facebook used Onavo to collect users’ location, time and frequency using other smartphone apps, and websites they visited for its own advertising purposes, the judge Wendy Abraham said in a written judgment.
“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,” Abraham wrote.
She added that the court could have fined Meta hundreds of billions of dollars since Australians downloaded the app 271,220 times and each breach of consumer law carried a A$1.1 million fine, but “the contraventions can be characterised as a single course of conduct”.
The fine was agreed by both sides but “carries with it a sufficient sting to ensure that the penalty amount is not such as to be regarded … as simply an acceptable cost of doing business”, she wrote.
Meta, which made global revenues of $116 billion last year, said in a statement the ACCC had acknowledged it never sought to mislead customers, and “over the last several years we have built tools to give people more transparency and control over how their data is used”.
In a statement, ACCC Chair Gina Cass-Gottlieb said Australian consumers should be able to make an informed choice about what happens to their data based on clear information.
