Meta has been handed a pair of fines totalling £10.5 million in Australia for breaching consumer law.
A federal court found that Meta misled the public by failing to disclose that it was using data gathered by its free VPN app for commercial purposes.
The judgement winds up a lawsuit launched by Australia’s competition regulator in December 2020.
The watchdog said Meta, then known as Facebook, had “deceived” users by claiming its Onavo Protect app would keep their data private, while using it to help its main business. A VPN, or virtual private network, creates an encrypted connection to keep internet activity hidden.
The watchdog also found that Onavo was installed more than 270,000 times by Australian users between February 2016 and October 2017.
In late 2018, Facebook was forced to remove the app from the iOS App Store after Apple said it violated data-collection policies. It later pulled the app from Google’s Play Store in 2019, effectively shutting it down for good.
Australia’s Federal Court fined Meta’s subsidiaries Facebook Israel and Onavo Inc. £5.25 million each for sharing user data with their parent for commercial benefit.
Facebook acquired Onavo in October 2013 for a reported $200 million and reportedly used it as a way of keeping track of its competitors. The app apparently showed that WhatsApp was heavily outpacing Facebook Messenger, convincing Facebook to shell out $19 billion for WhatsApp in February 2014.
Global regulators would later express regret for waving through the merger and Facebook’s acquisition of Instagram. Since then, competition watchdogs have stepped up their scrutiny of big tech, with the CMA recently ordering Meta to sell the gif creation website Giphy.
Meta is still facing a separate civil court action by Australia’s data watchdog over its dealings with disgraced data analytics firm Cambridge Analytica.
Commenting on Wednesday’s judgement, Australia’s competition regulator said: “We took this case knowing that 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.”
