In a landmark judgment cited by Reuters, the Australian Federal Court has ordered Meta Platforms, the parent company of Facebook, to pay fines amounting to $14 million for unlawfully collecting user data through its smartphone application, Onavo. The app was advertised as a virtual private network (VPN) service designed to safeguard user privacy, but it was covertly used to gather user’s personal information without their knowledge or consent.
The court also directed Meta and its subsidiaries, Facebook Israel and Onavo, to cover $272,800 in legal costs for the Australian Competition and Consumer Commission (ACCC), which spearheaded the civil lawsuit against the tech giant. This penalty marks the conclusion of one aspect of Meta’s legal entanglements in Australia, stemming from concerns over its mishandling of user data and its association with the infamous Cambridge Analytica scandal during the 2016 U.S. election.
Meta’s deception unveiled
Justice Wendy Abraham, who presided over the case, delivered a written judgment cited by Reuters that unveiled the deceptive practices employed by Meta through the Onavo app. While VPNs are designed to shield users’ online identities by providing them with alternate internet addresses, Meta surreptitiously utilised Onavo to track users’ locations, online activities, and app usage frequency for its own advertising purposes.
The court deemed Meta’s actions a violation of consumer trust, as the company failed to disclose its data collection practices adequately, depriving tens of thousands of Australian users of the opportunity to make an informed decision before using the Onavo Protect app. The court acknowledged that each breach of consumer law could have carried a fine of A$1.1 million, given that the app was downloaded 271,220 times by Australian consumers. However, the court classified the violations as a single course of conduct.
Although both parties mutually agreed upon the fine, Justice Abraham ensured it carried a significant impact, preventing it from being viewed as a mere cost of doing business. The company could have faced a substantially higher penalty if Meta had not accepted the settlement.
In response to the judgment, Meta released a statement asserting that the ACCC acknowledged their lack of intent to deceive customers. The company also highlighted its efforts over the past years in creating tools to offer users more transparency and control over their data usage.
Australia’s tech crackdown
ACCC Chair Gina Cass-Gottlieb emphasised the importance of providing clear and transparent information to Australian consumers, enabling them to make informed choices about handling their personal data. The ruling serves as a warning to tech companies operating in Australia to uphold user privacy and ensure compliance with consumer protection laws.
It is worth noting that this legal ruling does not conclude Meta’s legal challenges in Australia. The company still faces a civil court action by Australia’s Office of the Information Commissioner concerning its dealings with Cambridge Analytica within the country.
(With inputs from Reuters)
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