Facebook’s Original Fine
In November 2018, the Italian Competition Authority, AGCM, fined the social media giant, Facebook, €10 million. Facebook was fined €5 million each for two unfair commercial practices rulings. The authority ruled that Facebook was misleading Italian users with regards to how their data would be used. It said that Facebook didn’t provide adequate information as to why users’ personal data was being processed. And didn’t clearly state when new users signed up, that the data would be used for commercial purposes. The AGCM found there was no clear distinction between data gathered to personalize Facebook’s service and data gathered for advertising purposes. Furthermore, the AGCM declared Facebook had breached Italy’s consumer code by claiming that its service was free. As well as for selling users’ data to third parties by default and without the users’ express consent. The AGCM argued that since Facebook was selling their users’ data to third parties, their service was not free. Users’ were paying for the service with their data. Additionally, the authority said that if users decided to limit their consent, Facebook’s service was significantly restricted. According to the AGCM, this essentially forces users to use the pre-selected setting, which represents “undue influence”. It also prevents users from making a free and informed choice. Facebook appealed the AGCM’s decision, with the court upholding the first order in early 2020. As the second was dropped, Facebook still faces a fine of €5 million, which it is continuing to appeal.
Fined a Second Time
As part of the AGCM 2018 ruling, Facebook was required to publish a revised statement that clearly defined how their customers’ data would be used. The authority stipulated that the statement was to appear on the homepage of Facebook’s Italian website. It also specified that the amended statement must appear on Facebook’s Italian app and on the personal page of each registered Italian user. However, a recent investigation by the authority found that Facebook had not complied with the provisions of the 2018 order. Consequently, the authority fined Facebook a further €7 million (~$8.4 million). The AGCM said in an announcement that Facebook had not published the required revised statement. The authority noted that Facebook no longer used the slogan “It’s free and it will be forever”. However, it found that “clear and instant information is not yet provided on the collection and use of user data for commercial purposes.” The authority claims that this information is key in helping consumers make an informed decision whether to use Facebook’s service.
Facebook’s Response
A Facebook spokesperson said that the company had noted the announcement published by the AGCM yesterday. And that it was still awaiting an Italian Council of State’s decision on its appeal against the AGCM’s initial findings. The spokesperson went on to says that “Facebook takes privacy extremely seriously and we have already made changes, including to our Terms of Service, to further clarify how Facebook uses data to provide its service and to provide tailored advertising.” For a company with annual revenues of $86 billion, fines of €5 and €7 million don’t actually represent large sums of money. However, Facebook is facing increased regulatory scrutiny in many countries, including the US, and a growing number of fines. In the US, Facebook is facing twin antitrust lawsuits seeking to have the tech giant sell WhatsApp and Instagram. Furthermore, it has been fined or sued by various authorities in Australia, France, Germany, Hungary, Spain and the UK. In Australia, Facebook is in the middle of a dispute with the government over a new Media Code. The Australian Code requires the tech giant to remunerate news publishers for the content it uses. Most of the fines in the UK relate to the Facebook-Cambridge Analytica scandal of 2019. In the scandal millions of Facebook users had personal data mined and used in political campaigns.
