Two subsidiaries of Meta, the parent company of Facebook, have been ordered by the Australian government to pay a fine of $20 million for misleading customers with their advertising of a security app. The Consumer watchdog, the Australian Competition and Consumer Commission (ACCC), took legal action against Facebook Israel and Onavo Inc in the Federal Court, alleging that the companies promoted an app, Onavo Protect, as a means to protect users’ data while secretly mining their personal information.

Deceptive advertising and misuse of user data

Onavo Protect, a VPN app available on Android and Apple devices, was marketed as a tool to keep users’ data safe during web browsing and sharing. However, the court found that the advertisements failed to disclose that Meta used the app as a “business intelligence tool,” allowing them to gain extensive insights into users’ mobile device usage.

Justice Wendy Abraham ruled in favour of the ACCC, stating that the ads were likely to deceive consumers about how their data would be utilised. The court discovered that the data collected through Onavo Protect was anonymised and aggregated, then shared with Meta Platforms Inc. for various commercial purposes.

Court’s verdict and penalties

In response to the legal action, both Meta subsidiaries acknowledged their violation of the Competition and Consumer Act 2010. Justice Abraham ordered Facebook Israel and Onavo Inc to each pay $10 million to the Commonwealth of Australia as a penalty for their misleading advertisements and misuse of user data.

A spokesperson for Meta responded to the ruling, stating that the ACCC acknowledged that the app functioned properly as an online security tool. However, the court concluded that the disclosures about data usage included in the app’s terms of service and privacy policy needed to be more prominent and proximate enough in the listed advertisements on app stores.

The court emphasised the severity of the contraventions, affecting thousands of Australians who were deprived of the opportunity to make informed choices about the collection and use of their data. Although the maximum penalty possible was substantial, Justice Abraham determined that the agreed $20 million fine was sufficient to deter such deceptive practices. Additionally, Meta’s companies were ordered to contribute $400,000 towards the ACCC’s legal costs. 

The ruling serves as a reminder to tech companies about the importance of transparent advertising and safeguarding user data, sending a clear message that such actions will not be tolerated in Australia’s consumer protection landscape.

Jomar Teves

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After four years in business school and working for multinational clients, Jomar believes he can improve the world through his writings via Public Spectrum, by informing the public on the latest news and updates happening around the government and society. Jomar has eight years experience as a writer and has a degree in Business Administration and Entrepreneurial Marketing.

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