Meta is facing the repercussions of its acquisition of the Israeli mobile market intelligence company, Onavo, back in 2013. Onavo was utilized to power a supposedly free VPN/data management app, which falsely claimed to protect users’ privacy while actually sharing their usage data with Facebook for commercial purposes. This tactic allowed the tech giant to gain insights into popular rival apps, influencing its acquisition strategy and consolidating its hold on the social web.
While Meta had largely avoided legal consequences for using the deceptive guise of a free VPN app, Australia’s consumer watchdog, the Competition and Consumer Commission (ACCC), has now managed to secure an AUS$20 million (~$13.5 million) total penalty from two Meta-owned companies implicated in the matter: Facebook Israel and Onavo Inc.
The ACCC filed a lawsuit against Meta in December 2020, and a federal court has now ordered the two subsidiaries to each pay AUS$10 million for engaging in misleading conduct that breached the Australian Consumer Law. The two companies, responsible for developing and supplying the Onavo Protect VPN app, were found to have provided misleading descriptions of the app in both Google and Apple App Store listings.
During the period from February 2016 to October 2017, the “Onavo Protect” VPN app was installed more than 270,000 times by Australian users before Facebook shut down the service in May 2019.
The app was promoted in app store listings as a means to keep users’ data safe and protected. However, in reality, Onavo and Facebook Israel shared users’ personal activity data collected by the app in an anonymized and aggregated form with the parent company, Meta (formerly Facebook Inc), for commercial gain.
The ACCC aimed to hold Meta accountable as the parent company, but the case against Meta was dismissed by the Court following settlement negotiations between the parties, based on information about Meta’s role in the conduct.
The ACCC’s chair, Gina Cass-Gottlieb, emphasized that consumers have the right to make informed decisions about their data’s use and privacy. The case raised concerns about consumers using a virtual private network (VPN) to protect their privacy while unwittingly facilitating the use of their data for Meta’s commercial advantage.
Meta has yet to respond to the fine and has not provided any comment on the matter at the time of writing.
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