ACCC launches fresh proceedings against Facebook for misusing consumer app data

Regulatory watchdog is alleging Facebook used data collected by its Onavo Protect app to inform marketing and consumer acquisition activities

The Australian Competition and Consumer Commission (ACCC) is once again instigating proceedings against Facebook, this time for allegedly misusing consumer data relating to a VPN app for marketing purposes.

The regulatory watchdog is alleging Facebook and its subsidiaries, Facebook Israel and Onavo, misled Australian consumers by positioning the Onavo Protect virtual private network (VPN) app as keeping a user’s personal activity data private, protected and secret, thereby ensuring no data would be used for any other purpose than providing the Onavo product.

However, the ACCC alleges significant amounts of personal activity and app usage data was collected, aggregated and used to support Facebook’s market research activities including identifying potential consumer acquisition targets. Data included Onavo Protect user Internet and app activity, plus records of every app accessed and the number of seconds each day consumers spent using the apps. The alleged deception took place between 1 February 2016 and 1 October 2017.

ACCC chair, Rod Sims, said thousands of Australian consumers were potentially impacted by the collection of Onavo Protect data for commercial purposes. Onavo was acquired by Facebook in 2013 and rebranded Facebook Israel in 2014.

“We believe is completely contrary to the promise of protection, secrecy and privacy that was central to Facebook’s promotion of this app,” Sims stated. “Consumers often use VPN services because they care about their online privacy, and that is what this Facebook product claimed to offer. In fact, Onavo Protect channelled significant volumes of their personal activity data straight back to Facebook.”

The ACCC noted the Onavo Protect website stated its app would ‘save, measure and protect’ users’ mobile data, while advertisements on Facebook’s website and app included statements such as ‘Keep it secret. Keep it safe… Onavo Protect, from Facebook’.

“We believe the conduct deprived Australian consumers of the opportunity to make an informed choice about the collection and use of their personal activity data by Facebook and Onavo,” Sims said.

The ACCC is seeking declarations and pecuniary penalties.

In its statement, the ACCC noted Apple removed the Onavo Protect from its App store in 2018 for non-compliance with developer terms. This included collecting information about other apps installed on a user’s device. Onavo Protect was also removed from the Google Play store and discontinued in 2019.

The ACCC’s fresh proceedings are the latest step taken following its 2019 Digital Platforms Inquiry into the impact of digital giants, Google and Facebook, on Australia’s media and advertising landscape. The overarching view of the report was digital platform are adversely impacting everything from media competition, monetisation and journalism quality, through to consumer data, privacy and digital industry competition.

As a result of that inquiry, the ACCC was given new powers regulating competition across the industry and tasked with investigating Australia’s digital advertising services ecosystem. The resulting digital advertising services specialist inquiry kicked off in February and not only focuses on investigating competitiveness and efficiency across adtech services platforms, but also digital advertising agencies and the services they provide.

The scope of the inquiry includes availability and transparency of information across markets around such services, the concentration of power across the market, auction and bidding processes, merger and acquisitions activity, supplier behaviour and more.

News of the Facebook/Onavo proceedings comes a week after the Federal Government tabled the ACCC-proposed News Media Bargaining Code in Parliament, which sets out mandatory steps both news media organisations and digital platform providers are required to take in order to negotiate payments for content featured across platforms managed by Google and Facebook. The legislation again was the result of the Digital Platforms Inquiry.

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