Social media giant Meta and subsidiaries have copped $20 million in fines after an app that claimed to protect personal information was found to have collected user data for commercial purposes.
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Onavo Protect was a free mobile app made available by Meta that provided a virtual private network service which claimed to "keep you and your data safe online" and give users "peace of mind when you browse" according to its App Store listing.
The app, which had been downloaded more than 270,000 times in Australia, also told users their data would not be used for any purpose other than providing Onavo Protect's products.
But in 2020, the Australian Consumer and Competition Commission took Facebook Israel Ltd and its subsidiaries to court after it found Meta had collected significant amounts of user information for its own commercial benefit between February 2016 and October 2017.
In a judgment handed down on Wednesday, Federal Court Justice Wendy Abraham found the company's conduct was likely to mislead or deceive Australian consumers and fined the social media conglomerate $20m - $10m to Facebook and $10m to Onavo.
Meta also agreed to pay $400,000 for the ACCC's legal costs.
The consumer watchdog found Onavo Protect tracked users' online activity, taking records of every app they accessed and the exact number of seconds spent on each app, alongside information about their device and location data based on IP addresses.
If Onavo Protect users had a Facebook account, Meta could combine the data from both sources and learn "nearly everything they are doing on their mobile device".
Meta used the information, which had been anonymised and aggregated, for advertising and marketing activities such as identifying future acquisition targets and developing business strategies.
ACCC chair Gina Cass-Gottlieb said the commission was concerned consumers seeking to protect their privacy through a virtual private network "were not clearly told that they were actually facilitating the use of their data for Meta's commercial benefit".
"We believe Australian consumers should be able to make an informed choice about what happens to their data," she said after the court decision on Wednesday.
While the app technically revealed the ways it would use consumer data, these disclosures were nestled in the Terms of Service and Privacy Policy, which Justice Abraham found was "not sufficiently prominent or proximate" compared to the claims made about data protection in its app store listings.
However, she ultimately decided the assertions were "not deliberately misleading" and found no evidence that any senior management at Meta were involved in the contravening conduct.
A spokesperson from Meta said user data protection was important to the company and maintained Onavo Protect had properly functioned as an online security tool.
"Protecting the privacy and security of people's data is fundamental to how Meta's business works," Meta said in a statement.
"Over the last several years, we have built tools to give people more transparency and control over how their data is used and we design every new product and feature with privacy in mind."
The Federal Court's decision comes almost a year after Meta agreed to pay $1.1 billion for providing political consulting firm Cambridge Analytica access to data from as many as 87 million Facebook users, on top of previous billion-dollar penalties.
The Australian Information Commissioner earlier this year sued the company for breaching the privacy of 311,000 Australian users.
The Onavo Protect app is no longer available on the App Store or Google Play Store.
Australian Associated Press
