Australia Sues Facebook Over Onavo Privacy Concerns

Facebook is confronting further legal challenges as Australia’s Competition and Consumer Commission (ACCC) has initiated a lawsuit against the company regarding its utilization of the Onavo VPN application between 2016 and 2017 for the purpose of user monitoring related to commercial interests.

The ACCC’s legal action alleges that Facebook engaged in deceptive or misleading practices towards numerous Australian consumers. This stems from the promotion of the Onavo Protect app, where assurances were given regarding the privacy, protection, and confidentiality of user data, while simultaneously leveraging that data to benefit Facebook’s operations.

According to ACCC chair Rod Sims, in a released statement, “Facebook was gathering and employing highly detailed and valuable personal data from thousands of Australian consumers for its own business objectives, a practice we contend directly contradicts the promises of security, privacy, and confidentiality that were central to the app’s marketing.”

“Individuals frequently employ VPN services due to their concern for online privacy, and this Facebook product explicitly claimed to deliver that. However, Onavo Protect actually transmitted substantial amounts of users’ personal activity data directly back to Facebook,” Sims explained.

“We contend that this behavior prevented Australian consumers from making well-informed decisions regarding the collection and utilization of their personal activity data by Facebook and Onavo,” Sims further stated.

The ACCC asserts that from February 1, 2016, to October 2017, Facebook, along with its subsidiaries Facebook Israel Ltd and Onavo, Inc., misrepresented the functionality of the freely available Onavo Protect app to Australian consumers.

The regulatory body indicates it is pursuing both declarations and financial penalties in the case.

In response to inquiries about the lawsuit, a Facebook spokesperson stated: “When individuals downloaded Onavo Protect, we consistently provided transparent information regarding the data we collect and its intended use.”

“We have fully cooperated with the ACCC’s investigation to date. We will carefully review the ACCC’s recent submission and will continue to defend our position accordingly,” the spokesperson added.

Facebook previously announced the discontinuation of the Onavo Protect app last year, following criticism concerning its data collection practices through the VPN application, which it had originally acquired in 2013.

Internal Facebook documents, revealed during a legal discovery process and subsequently released by the UK parliament in 2018 as part of an investigation into online disinformation, demonstrate the company’s use of Onavo data to gain commercial insights into the third-party applications being downloaded and used by its user base.

Information obtained through Onavo identified WhatsApp as a competitive threat to Facebook’s Messenger application. Following this insight, Facebook proceeded to acquire the rival messaging app for $19 billion.

The company is currently embroiled in a significant antitrust case within the United States, where 46 states have accused it of stifling competition through monopolistic practices—with the acquisitions of Instagram and WhatsApp highlighted as key examples.

The FTC and US legislators are advocating for the reversal of these mergers and the dismantling of Facebook’s extensive social media holdings as a necessary course of action.

In addition, Facebook is facing legal action in Germany, where the Federal Cartel Office (FCO) is pursuing a case that could impose restrictions on its ability to integrate data across its various owned services.

This month, the FCO also initiated an investigation into Facebook’s requirement that users of its latest Oculus VR equipment possess a Facebook account, following its announcement that new Oculus users must have a Facebook account to operate the device. Facebook also stated it will cease support for existing Oculus accounts by 2023.