Facebook privacy app spied on users for market research, ACCC says

Facebook misled consumers by collecting sensitive personal data through an app it promised would protect their privacy, and leveraged it for market research, the Australian consumer watchdog has alleged.

Onavo Protect was a free app run by Facebook from 2016. It allowed users to measure and restrict their mobile data usage, as well as offering a virtual private network for secure browsing, which required users to grant the app extensive permission to monitor their phone use.

Facebook's Onavo app offered a free VPN and mobile data manager, which was essentially sitting between users and all their online activity.

The social media giant came under scrutiny when it transpired the app was sending analytical data back to Facebook, including information on people's usage of other apps and websites. Media reports at the time claimed Facebook used this data, in one instance, to identify its burgeoning rival WhatsApp as a target for acquisition.

The Australian Consumer and Competition Commission announced on Wednesday it had brought proceedings against Facebook in the Federal Court as it believes the practices of the app — which is now defunct after being delisted from app stores in 2018 — constituted false, misleading or deceptive conduct.

"[Facebook] misled Australian consumers by representing that the Onavo Protect app would keep users’ personal activity data private, protected and secret, and that the data would not be used for any purpose other than providing Onavo Protect’s products," the ACCC said in a statement.

"In fact, the ACCC alleges, Onavo Protect collected, aggregated and used significant amounts of users’ personal activity data for Facebook’s commercial benefit."

A spokesperson for Facebook said the app — which the company acquired as part of its $US150 million purchase of Israeli tech company Onavo in 2013 — was in no way deceptive.

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

"We’ve cooperated 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."

Text describing the app in the Google Play store said mobile data would be collected and analysed to improve Onavo and help Facebook "gain insights into the products and services people value".

But ACCC Chair Rod Sims said there was a stunning contrast between how the app was promoted — as a way to protect your data security and privacy — and what actually happened once it was installed.

"The representations were very clear in terms of protecting privacy," Mr Sims said.

"There were disclosures, once you'd already got the app, which we don't think were at all adequate."

The ACCC is seeking declarations from the court that the practice was illegal, setting clear ground rules for Facebook and other companies in terms of what they can say to consumers.

The watchdog is already involved in similar cases against Google, alleging the search engine giant misled customers about location data collection and its move to aggregate different kinds of user information for targeted advertising.

"We need some court rulings that make it crystal clear what can and can't be done. And if we get those rulings then, particularly now that we've got much higher consumer law penalties, I think we'll have a framework that can dissuade platforms from misleading consumers," Mr Sims said.

The regulatory heat is rising for tech giants outside of Australia too, with antitrust action against Facebook in the US alleging a pattern of acquisitions designed to eliminate competition, and proposals for new laws in Europe that would make platforms accountable for content they host and prevent companies preferencing their own services and products.

"Now that there's been this range of action, plus the proposals for more regulation, and prescribed rules about what you can and can't do, I think the regulatory community is catching up to what's going on with platforms. And I think it will make a huge difference," Mr Sims said.

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