The Australian Competition and Consumer Commission (ACCC) is taking Facebook to court over alleged misleading claims about data privacy when promoting the Onavo Protect VPN app.

Billed as a privacy focused-VPN, Facebook-owned Onavo Protect claimed to “protect and encrypt” personal data on mobile devices and was advertised with the tagline “Keep it secret. Keep it safe.”

According to Rod Sims, chair of the ACCC, Facebook did not properly disclose to customers the fact that Onavo Protect was harvesting data about app and internet usage on devices where it was installed.

“Consumers often use VPN services because they care about their online privacy, and that is what this Facebook product claimed to offer,” Sims said in a statement.

“In fact, Onavo Protect channelled significant volumes of their personal activity data straight back to Facebook.

“We believe that the conduct deprived Australian consumers of the opportunity to make an informed choice about the collection and use of their personal activity data by Facebook and Onavo.”

Onavo was an Israeli company co-founded by Facebook’s current VP of Integrity, Guy Rosen.

In 2013, the social media behemoth acquired Onavo for an estimated US$120 million, spinning the startup into Facebook Israel Ltd.

When installed, the Onavo Protect VPN monitored mobile data use and notified users when apps were using large amount of data.

Crucially, it also analysed the data and provided Facebook with information on which of its competitors Onavo Protect’s customers were also using, when they used them, and for how long.

Insights from the Onavo data helped influence Facebook’s decision to acquire messaging platform Whatsapp, according to a 2017 report from the Wall Street Journal.

That acquisition is at the heart of an anti-trust lawsuit filed by US state and federal attorneys last week.

Onavo discontinued Protect in 2019 and put up a notice on its website telling users to uninstall the apps.

A Facebook spokesperson denied users were misled about the VPN’s data collection policies.

“When people downloaded Onavo Protect, we were always clear about the information we collect and how it is used,” the spokesperson said in a statement to Information Age.

“We’ve cooperated with the ACCC’s investigation into this matter to date. We will review the recent filing by the ACCC and will continue to defend our position in response to this recent filing.”

Arguably one of the world’s most powerful companies, Facebook is coming under increasing scrutiny as regulators in the US, Australia, and Europe begin clamping down on over a decade of nearly unchallenged growth, power, and wealth accumulation.

On Tuesday, the European Union Commission proposed two new pieces of legislation aimed at further limiting the power of massive US tech companies like Facebook and Google.

The reforms would see companies take greater responsibility for content shared on their platforms, add transparency around how algorithms target users, and seek to create a more competitive environment for smaller companies.

Aside from large fines – ranging up to 10 per cent of a company’s worldwide turnover – the laws would also give the EU power to “take structural measures” like forcing divestiture of uncooperative businesses.