Australia: Federal Court imposes $20M fine on Meta subsidiaries for misleading consumers
On July 26, 2023, the Australian Competition and Consumer Commission (ACCC) announced that, following court action by the ACCC, the Federal Court had ordered two Meta subsidiaries, Facebook Israel Ltd and Onavo Inc, to pay a fine of $10 million each for misleading consumers about the collection and use of their personal data on the Onavo Protect app.
Background to the case
The ACCC highlighted that in December 2020, it instituted proceedings against Facebook (now known as Meta Platforms, Inc.) and two of its subsidiaries, Facebook Israel and Onavo for alleged false, misleading, or deceptive conduct when promoting its Onavo Protect mobile app to Australian consumers.
According to the ACCC, the app store listings suggested that user data collected by the Onavo Protect app would be solely used for providing the VPN service. However, the ACCC noted that Facebook Israel and Onavo shared anonymized and aggregated user activity data with the parent company Meta for commercial purposes, including as a 'business intelligence tool.'
Moreover, the ACCC estimated that the app was installed more than 270,000 times by Australian users between February 2016 and October 2017 before the service was discontinued in May 2019.
Findings of the Federal Court
The ACCC stated that the Federal Court found that the two companies breached the Australian Consumer Law by failing to disclose to users of the Onavo Protect app that their data would be used for purposes other than the ones related to the app.
The ACCC noted that Facebook Israel and Onavo were ordered by the Federal Court to pay a penalty of $10 million each for their violations of the Australian Consumer Law. Additionally, the ACCC highlighted that the Federal Court also issued orders requiring the two companies to contribute towards the ACCC's legal costs.
You can read the press release here.