Facebook To Pay $9 Million Penalty For Making Misleading Claims About Privacy: Competition Bureau

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Facebook to pay $9 million penalty to settle Competition Bureau concerns about misleading privacy claims. Facebook is one of the largest social media platforms in the world with an estimated 2.6 billion global users and 24 million Canadian users active each month. The social media giant earns most of their revenue through advertising, according to the bureau, including targeted ads based in part on the information provided by users. Photo courtesy of CNW Group/Competition Bureau

Facebook will pay a $9 million penalty along with an additional $500,000 to cover the costs of an investigation by the Competition Bureau, which concluded that the company made false or misleading claims about the privacy of Canadians’ personal information on Facebook and Messenger.

The payments are part of a settlement registered on May 19 with the Competition Tribunal following an investigation that looked at Facebook’s practices between August 2012 and June 2018. The bureau found that Facebook gave users the impression that they could control who was able to see and access their personal information on the platform through privacy features like the Privacy Settings page or the audience selector menu on posts. Despite their privacy claims, Facebook shared some users’ personal information with certain third-party developers in a way that was inconsistent with their policies, according to the bureau, including sharing content users posted on Facebook and messages users exchanged on Messenger. 

“Canadians expect and deserve truth from businesses in the digital economy, and claims about privacy are no exception,” said Commissioner of Competition Matthew Boswell in a statement from the bureau. “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.”

Facebook also gave some third-party developers access to the personal information of users’ friends after users installed certain third-party applications, according to the bureau. Facebook claimed it would stop allowing access to the personal information of users’ friends after April 30, 2015, but the bureau says the practice continued until 2018 with some third-party developers.

The Competition Act prohibits companies from making false or misleading claims about a product or service to benefit their business interests, and it includes claims about the collecting information, why it’s collected and how it’s used. The act applies to free digital products the same way it applies to paid products or services, according to the bureau. 

“Although we do not agree with the Commissioner’s conclusions, we are resolving this matter by entering into a consent agreement and not contesting the conclusions for the purposes of this agreement,” a Facebook spokesperson told Reuters. The bureau acknowledged Facebook’s voluntary cooperation in resolving the matter in their statement. 

As part of the settlement, Facebook agreed not to make false or misleading representations about the disclosure of personal information, including representations about the ability users have to control access to their personal information on Facebook and Messenger.

“Advances in technology are allowing firms to collect large amounts of data from consumers,” said the statement from the bureau. “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 strongly encourages anyone who feels they have been misled by privacy claims to file a complaint. The registered settlement will be available soon on the Competition Tribunal’s website.

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