The lawsuit echoes a landmark US Federal Trade Commission action accusing Facebook of inappropriately maintaining market dominance.
An Australian regulator sued Facebook on Wednesday accusing it of collecting user data without permission, building on government efforts around the world to rein in the social network.
The Australian Competition and Consumer Commission (ACCC) said it was seeking an unspecified fine from Facebook for promoting a virtual private network as a way for people to protect their data, while secretly using the information to pick targets for commercial acquisitions.
The lawsuit echoes a landmark US Federal Trade Commission action accusing the social media giant of inappropriately maintaining market dominance by using customer data to decide on takeover targets including messaging app Whatsapp and image-sharing app Instagram.
A Facebook spokeswoman said the company was always clear about the information we collect and how it is used.
We will review the recent filing by the ACCC and will continue to defend our position in response to this recent filing, she added.
Facebook shut down the VPN product in 2019.
Earlier this month, Australia went ahead with plans to make Facebook and Internet giant Google pay domestic media outlets for content that appeared on their websites, at Sims’s recommendation.
The Australian privacy regulator has a separate lawsuit against Facebook accusing it of breaching user privacy with a personality test run by political marketing consultant Cambridge Analytica. Facebook is defending that action. The ACCC is also suing Google alleging it misled users about data collection.
Unlike the US lawsuit, which may force Facebook to sell assets, the Australian lawsuit may force the company to change the way it discloses its activities to users, said Rob Nicholls, a University of New South Wales associate professor who specialises in competition law.
Rather than take the antitrust approach of ‘the only way to solve this is to break it up’, it’s more ‘we’re going to take the actions that we can under the existing law to change the conduct so that it is acceptable to Australian consumers and Australian businesses, Nicholls said.
Facebook users had accused the company of quietly storing cookies on their browsers that tracked when they visited outside websites containing like buttons, and then selling personal profiles based on their browsing histories to advertisers.
U.S. District Judge Edward Davila in San Jose, California had dismissed the lawsuit in 2017, including claims under the federal Wiretap Act, and said the users lacked legal standing to pursue economic damages claims.
But in Thursday’s decision, Chief Judge Sidney Thomas wrote for a three-judge panel that users had a reasonable expectation of privacy, and had sufficiently alleged a clear invasion of their right to privacy.
The panel also said California law recognized a right to recoup unjustly earned profits, regardless of whether a defendant’s conduct directly caused economic harm.
Facebook’s user profiles would allegedly reveal an individual’s likes, dislikes, interests, and habits over a significant amount of time, without affording users meaningful opportunity to control or prevent the unauthorized exploration of their private lives, Thomas wrote.
Citing Facebook’s data use policy, he also said the plaintiffs plausibly alleged that Facebook set an expectation that logged-out user data would not be collected, but then collected it anyway.
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