The Federal Court has ordered two subsidiaries of social media platform Meta, Facebook Israel and Onavo Inc, to each pay $10 million for engaging in conduct liable to mislead in breach of the Australian Consumer Law,.
In an action brought by competition watchdog the ACCC, the court declared that the two companies engaged in conduct liable to mislead the public in promotions for the Onavo Protect app, by failing to adequately disclose that users’ data would be used for purposes other than providing Onavo Protect, including Meta’s commercial purposes.
Onavo Protect, a free app providing a virtual private network (VPN) service, was installed more than 270,000 times by Australian users between February 2016 and October 2017.
In Google and Apple App Store listings, Onavo Protect was promoted as a product that would keep users’ data protected and safe, for example with language such as “Use a free, fast and secure VPN to protect personal information” and “Helps Keep You and Your Data Safe”.
In fact, Onavo and Facebook Israel shared the personal activity data from users collected by the app in anonymised and aggregated form with parent company Meta (then known as Facebook Inc) for commercial benefit.
Meta said: "The Federal Court of Australia has approved the penalty Facebook Israel and Onavo Inc jointly proposed with the ACCC regarding disclosures by the app Onavo Protect in the Apple App Store and Google Play Store in 2016 and 2017.
"The ACCC acknowledged in the joint filing that the Onavo Protect listings were not deliberately misleading and disclosures were made in the app’s Terms of Service and Privacy Policy. Furthermore, all user data was anonymised and aggregated before it was used by Meta.
"The Onavo Protect app did provide users with a free, useful VPN service and it did function properly as an online security tool. There was no allegation by the ACCC that the app did not function properly as an online security tool.
"Protecting the privacy and security of people’s data is fundamental to how Meta’s business works. 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."
ACCC chair Gina Cass-Gottlieb said many consumers are concerned about how their data is captured, stored and used by digital platforms.
"We believe Australian consumers should be able to make an informed choice about what happens to their data based on clear information that is not misleading,” Cass-Gottlieb said.
Anonymised and aggregated data shared with Meta included data about users’ internet and app activity, such as records of every app they accessed and time they spent using those apps. This was used to support Meta’s market research activities.
In joint submissions to the Court, Facebook Israel and Onavo agreed that the App Store listings conveyed that Onavo Protect users’ data would only be used to provide the Onavo Protect VPN.
The listings did not mention that data collected by Onavo Protect about its Australian users’ online activities was also used for other purposes, including as a ‘business intelligence tool’.
“In the case of the Onavo Protect app, we were concerned that consumers seeking to protect their privacy through a virtual private network were not clearly told that in downloading and using this app they were actually facilitating the use of their data for Meta’s commercial benefit,” Cass-Gottlieb said.
Facebook Israel and Onavo were also ordered to pay a contribution to the ACCC’s costs and consented to the declarations and costs order, and made joint submissions with the ACCC in relation to penalties.
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