Facebook's Parent Company, Meta, Slapped with a Whopping $14M Penalty by Australia for Sneaky Data Harvesting

On an upbeat note from Sydney, Australia, on July 26th, Meta Platforms, the tech giant behind Facebook, was mandated by an Australian court to fork out MYR63.2 million (around $14 million). This penalty was the consequence of Meta's alleged harvesting of user data through a mobile app promoted as a privacy safeguard tool, without revealing its true intents.

The Federal Court of Australia went further to instruct Meta, inclusive of its subsidiaries Facebook Israel and the now-defunct app, Onavo, to shoulder legal fees totalling MYR1.81 million. These costs were accrued by the Australian Competition and Consumer Commission (ACCC), who initiated the civil lawsuit.

This resolution puts to rest one aspect of Meta's legal troubles in Australia, specifically relating to its handling of user data. These concerns gained global visibility following a controversy about Meta's engagement with data analytics firm, Cambridge Analytica, during the 2016 U.S. elections.

However, Meta still has another civil lawsuit to contend with in Australia, filed by the Office of the Information Commissioner, in relation to its dealings with Cambridge Analytica.

The recent judgment was connected to a virtual private network (VPN) service that Meta used to provide under the name Onavo. This service was marketed from early 2016 to late 2017 as a secure method for protecting personal information. VPNs work by obscuring a user's digital identity with a different virtual address.

Contrary to its claims, Meta utilized Onavo to collect data on users' locations, frequency of smartphone app use, and the websites they visited, all for its own advertising benefits, as outlined by Judge Wendy Abraham.

Abraham highlighted Meta's insufficient disclosure, suggesting it could have deprived tens of thousands of Australians of the chance to make informed choices regarding their data collection and usage before downloading or using Onavo Protect.

She also noted that while Meta could have been hit with a fine of hundreds of billions of Malaysian Ringgit—given the app was downloaded 271,220 times and each violation of consumer law warranted a MYR4.98 million fine—the infractions were viewed as a single course of conduct.

The fine was agreed upon by both parties and was meant to serve as a sufficient deterrent rather than merely an operational cost, according to Abraham.

Despite the legal fallout, Meta, which enjoyed global revenues of around MYR525.48 billion ($116 billion) last year, asserted in a statement that it never sought to deceive its users. Additionally, it emphasized that it had crafted tools to enhance transparency and control over data usage in recent years.

ACCC Chair, Gina Cass-Gottlieb, in a statement, emphasized that Australian consumers should be able to make informed decisions about their data based on clear and comprehensive information.

(Conversion rate used: $1 = 4.53 Ringgit Malaysia)

Source : Reuters (Reporting by Byron Kaye)