Facebook to pay $9 million penalty to settle Competition Bureau concerns about misleading privacy claims

GATINEAU, QC, May 19, 2020 /CNW/ - Facebook Inc. will pay a $9 million penalty after the Competition Bureau concluded that the company made false or misleading claims about the privacy of Canadians' personal information on Facebook and Messenger. Facebook will also pay an additional $500,000 for the costs of the Bureau's investigation.

The payments are part of a settlement registered today with the Competition Tribunal in which Facebook has agreed not to make false or misleading representations about the disclosure of personal information. This includes representations about the extent to which users can control access to their personal information on Facebook and Messenger. 

Following an investigation that took into account Facebook's practices between August 2012 and June 2018, the Bureau concluded that:

• Facebook gave the impression that users could control who could see and access their personal information on the Facebook platform when using privacy features, such as the general "Privacy Settings" page, the "About" page and the audience selector menu on posts, among others.
• However, 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 personal information included content users posted on Facebook, messages users exchanged on Messenger, and other information about identifiable users.
• 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 practice continued until 2018 with some third-party developers.

The 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. The Act applies to "free" digital products the same way it applies to regular products or services purchased by consumers.

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 Bureau acknowledges Facebook's voluntary cooperation in resolving this matter. The registered settlement (consent agreement) will be available soon on the Competition Tribunal's website.

Quote

"Canadians expect and deserve truth from businesses in the digital economy, and claims about privacy are no exception. 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."

Matthew Boswell,
Commissioner of Competition

Quick Facts

• Facebook is one of the largest social media platforms in the world. It recently estimated that 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. During the fourth quarter of 2018, Facebook's average revenue per month per user in Canada and the United States was USD$34.86.
• We strongly encourage anyone who feels they have been misled by privacy claims to file a complaint with the Bureau.

Associated Links

• Digest 5: Big data and the hidden cost of "free" digital products and services
• Honest Advertising in the Digital Age
• Big data and innovation: key themes for competition policy in Canada

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The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

SOURCE Competition Bureau