Facebook Fined $11m for Misleading Users How Data Will be Used

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Jul 27, 2015
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Italy’s competition regulator announced on Friday that it’s fining Facebook €10m (USD $11m, £8.9m) for laying it on thick when it comes to the service being “free” to users but keeping quiet about how the company’s making money off their data.

The fines come out of an investigation the Italian Competition Authority (ICA) wrapped up on 29 November. Opened last April, it looked into alleged violations of the Consumer Code by Facebook Ireland Ltd. and its parent company, Facebook Inc. Here’s what the ICA had to say about it:
  • Facebook emphasizes the free nature of the service but not the commercial objectives that underlie the provision of the social network service, thus inducing users into making a transactional decision that they would not have taken otherwise (i.e., to register in the social network and to continue using it). The information provided is in fact general and incomplete and does not adequately make a distinction between the use of data to personalize the service (in order to connect “consumer” users with each other) and the use of data to carry out advertising campaigns aimed at specific targets.
Facebook violated four of the Consumer Code articles, the ICA concluded: by misleading consumers into “registering without adequately and immediately informing them during the creation of the account that the data they provide will be used for commercial purposes,” it’s violated articles 21 and 22. The ICA also found that Facebook has violated articles 24 and 25 with “aggressive” business practices, as it “exerts undue influence on registered consumers,” it said. Those users are hurt by Facebook’s failure to give them “express and prior consent,” leading to transmission of their data “unconsciously and automatically” to third-party websites and apps for commercial purposes, and vice versa.
 

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