Facebook sued by Australian watchdog over ’spyware’ app

Hundreds of thousands of Australians downloaded an app from Facebook promising to keep their private information “secret” even though it was actually harvesting “significant amounts of users’ personal activity data” for the social network’s “commercial benefit,” Australia’s consumer watchdog claimed today.

The Australian Competition and Consumer Commission launched legal action against Facebook over the issue in the Federal Court, claiming consumers were misled into using the app, and seeking a penalty that could run into millions of dollars.

But the tech giant has rejected claims it misled users and has pledged to “continue to defend our position” in court.

The watchdog claims Facebook promoted the Onavo Protect app to its users as a virtual private network with the tagline “keep it secret, keep it safe,” even though the app “collected, aggregated and used” huge amounts of private information from users, logging every app they accessed and how long they spent using it.

ACCC chairman Rod Sims said Facebook used the data for the company’s own purposes, such as identifying potential takeover targets.

“Through Onavo Protect, Facebook was collecting and using the very detailed and valuable personal activity data of thousands of Australian consumers for its own commercial purposes, which we believe is completely contrary to the promise of protection, secrecy and privacy that was central to Facebook’s promotion of this app,” Mr Sims said.

“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.”

Mr Sims told News Corp the lawsuit was subject to the ACCC’s older penalty regimen, with a maximum fine of $1.1 million per breach, but the Court could find Facebook was guilty of multiple breaches leading to a “significant” cost even for the multibillion-dollar social network.

But he said the main purpose of the lawsuit was to establish guidelines for the behaviour of tech giants in Australia.

“The reason we took this case is we wanted to send a message that you can’t sell a product on one basis, that you’re protecting information, when the reality is that consumers are being exposed to a significant gathering of data, particularly their internet and app activity,” he said.

“What we’re trying to do with these cases is get some boundaries from the Court on what platforms can and can’t do when they’re interacting with consumers.”

Facebook promoted the Onavo Protect app as a privacy solution to Australian consumers between February 2016 and October 2017, the ACCC claimed.

But Apple removed the app from its App Store in 2018 for breaking its rules about collecting data on the use of other apps, and Facebook discontinued the app last year.

Experts told News Corp at the time they were “baffled and a little bit appalled” that any social network would attempt to collect users’ data in this way.

Despite the app’s removal, a Facebook spokesperson said the social network would defend its actions.

“When people downloaded Onavo Protect, we were always clear about the information we collect and how it is used,” the spokesperson said.

“We’ve co-operated with the ACCC’s investigation into this matter to date. We will review the recent filing by the ACCC and will continue to defend our position in response to this recent filing.”

Australia’s legal action against Facebook is expected to be watched closely by American lawmakers after the Federal Trade Commission launched a landmark case against the company last week, alleging it was “illegally maintaining its personal social networking monopoly through a years-long course of anti-competitive conduct”.

The FTC is seeking a permanent injunction that could break up Facebook, and force it to sell assets Instagram and WhatsApp.

The US lawsuit also mentioned Facebook’s use of the Onavo Protect app.

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