Home Business Facebook agrees to $9 million fine for making misleading privacy claims

Facebook agrees to $9 million fine for making misleading privacy claims

Web giant allowed certain third-party developers to access personal information

The Competition Bureau has announced that web giant Facebook is agreeing to pay a $9 million penalty after the federal law enforcement agency concluded the company made false or misleading statements about the privacy of Canadians’ personal information on Facebook and Facebook Messenger.

Will crack down, says Bureau

“Canadians expect and deserve truth from businesses in the digital economy, and claims about privacy are no exception,” said Matthew Boswell, head of the Competition Bureau, known formally as the Commissioner of Competition.

“The Competition Bureau will not hesitate to crack down on any business that makes false or misleading claims to Canadians about how they use personal data, whether they are multinational corporations like Facebook or smaller companies,” he added.

Will also pay legal fees

According to the terms, Facebook will pay an additional $500,000 for the costs of the bureau’s investigation. The payments are part of a settlement registered last week with the Competition Tribunal in which Facebook has agreed not to make false or misleading representations about the disclosure of personal information.

Social meda platform Facebook has agreed to pay a $9 million fine following a Competition Bureau inquiry that concluded the Web Giant made misleading statements to the public.

According to a statement issued by the bureau, this includes representations about the extent to which users can control access to their personal information on Facebook and Messenger.

Six-year investigation

Following an investigation that took into account Facebook’s practices between August 2012 and June 2018, the bureau concluded that Facebook gave the impression users could control who could see and access their personal information on the Facebook platform when using privacy features.

These included the general “Privacy Settings” page, the “About” page and the audience selector menu on posts, among other things.

However, the bureau added, Facebook did not limit the sharing of users’ personal information with some third-party developers in a way that was consistent with the company’s privacy claims. This information included content users posted on Facebook, messages users exchanged on Messenger, and other information about identifiable users.

Practice still continued

The bureau said Facebook also allowed certain third-party developers to access the personal information of users’ friends after users installed certain third-party applications. While Facebook made claims that it would no longer allow such access to the personal information of users’ friends after April 30, 2015, the bureau said the practice continued until 2018 with some third-party developers.

The bureau noted that the federal Competition Act forbids companies from making false or misleading claims about a product or service to promote their business interests. This includes claims about the information they collect, why they collect it, and how they use it.

Claims must be true

According to the Competition Bureau, the Act applies to “free” digital products in the same way that it applies to regular products or services purchased by consumers. They noted that advances in technology are allowing firms to collect large amounts of data from consumers.

“Whether or not their products or services are free, firms must ensure that their claims about the collection and use of data are not false or misleading,” the Competition Bureau said in a statement issued when the penalty imposed on Facebook was announced last week.

However, the bureau acknowledged Facebook’s voluntary cooperation in resolving the matter. They said that a copy of the registered settlement (consent agreement) would be available soon on the Competition Bureau Tribunal’s website.

Targeted advertising revenue

As the Competition Bureau pointed out, Facebook is one of the largest social media platforms in the world. The company, founded by Mark Zuckerberg in 2004, recently estimated it has 2.6 billion monthly active global users. It has previously estimated that its Messenger platform has 1.3 billion monthly active global users.

Facebook earns revenue primarily by selling advertising services, including targeted advertisements, based in part on the information provided by its users.

Facebook has previously estimated that it has 24 million monthly active Canadian users. The Competition Bureau says that during the fourth quarter of 2018, Facebook’s average revenue per month per user in Canada and the United States was $34.86 U.S.

Fined $5 billion in the U.S.

Facebook has had similar penalties imposed on it in countries other than Canada. In 2019, the U.S. Federal Trade Commission imposed a $5-billion fine on the company, the largest ever of its kind for an information technology company.

And in 2016, the French government’s privacy regulation agency forced Facebook to alter its personal information tracking policy.

Last year, Facebook’s Zuckerberg announced a new vision for the company, ostensibly focused on privacy. The Competition Bureau says it strongly encourages anyone who feels they have been misled by privacy claims to file a complaint with the bureau.