The Australian Federal Court has ordered Meta, the parent company of Facebook and Instagram, to pay $20 million for misleading customers.
The Australian Competition and Consumer Commission (ACCC) launched action in the Federal Court against the Meta companies for misleading customers by promoting an app advertised as protecting users’ data.
On Wednesday, Meta’s subsidiaries, Facebook Israel and the now discontinued VPN app Onavo Inc, were ordered by Justice Wendy Abraham to pay $10 million each to the Commonwealth of Australia.
The court ruled that the subsidiaries did not adequately advise users the free smartphone security app was mining their data, and the companies accepted they were in breach of the Competition and Consumer Act 2010, as reported by the ABC.
Reuters reported that Facebook advertised Onavo as a way for people to keep their personal information safe. However, according to the report, the app collected their location, time and frequency using other smartphone apps and websites visited for its own commercial purposes
In a written ruling, Abraham said: “While Onavo Protect was advertised and promoted as protecting users’ personal information and keeping their data safe, in fact, Facebook Israel and Onavo used the app to collect an extensive variety of data about users’ mobile device usage.
“An anonymised and aggregated form of that data was provided to their parent company, Meta Platforms Inc (Meta), and used by Meta for a range of commercial purposes.”
Justice Abraham noted in her ruling that under the Competition and Consumer Act 2010, the maximum penalty could have been “more than $145 billion”, or $1.1 million for each breach.
She said the contraventions were “undoubtedly serious”, noting thousands of Australians were deprived of an opportunity to make an “informed choice about the collection and use” of their data.
Justice Abraham added: “I am satisfied the agreed penalty of $20 million, in the circumstances, satisfies the significant element of deterrence required in this proceeding.
“It carries with it a sufficient sting to ensure that the penalty amount is not such as to be regarded by the parties or others as simply an acceptable cost of doing business.”