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Australia sues Facebook over Cambridge Analytica, fine could scale to $529BN

Natasha Lomas
Facebook CEO Mark Zuckerberg testifies before a joint hearing of the US Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee on Capitol Hill, April 10, 2018 in Washington, DC. Zuckerberg, making his first formal appearance at a Congressional hearing, seeks to allay widespread fears ignited by the leaking of private data on tens of millions of users to British firm Cambridge Analytica working on Donald Trump's 2016 presidential campaign. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)

Australia's privacy watchdog is suing Facebook over the Cambridge Analytica data breach -- which, back in 2018, became a global scandal that wiped billions off the tech giant's share price yet only led to Facebook picking up a $5BN FTC fine.

Should Australia prevail in its suit against the tech giant the monetary penalty could be exponentially larger.

Australia's Privacy Act sets out a provision for a civil penalty of up to $1,700,000 to be levied per contravention -- and the national watchdog believes there were 311,074 local Facebook users in the cache of ~86M profiles lifted by Cambridge Analytica . So the potential fine here is circa $529BN. (A very far cry from the £500k Facebook paid in the UK over the same data misuse scandal.)

In a statement published on its website today the Office of the Australian Information Commissioner (OAIC) says it has lodged proceedings against Facebook in a federal court alleging the company committed serious and/or repeated interferences with privacy.

The suit alleges the personal data of Australian Facebook users was disclosed to the This is Your Digital Life app for a purpose other than that for which it was collected -- thereby breaching Australia's Privacy Act 1988. It further claims the data was exposed to the risk of being disclosed to Cambridge Analytica and used for political profiling purposes, and passed to other third parties.

This is Your Digital Life was an app built by an app developer called GSR that was hired by Cambridge Analytica to obtain and process Facebook users' data for political ad targeting purposes.

The events from which the suit stems took place on Facebook's platform between March 2014 and May 2015 when user data was being siphoned off by GSR, under contract with Cambridge Analytica -- which worked with US political campaigns, including Ted Cruz's presidential campaign and later (the now) president Donald Trump.

GSR was co-founded by two psychology researchers, Aleksandr Kogan and Joseph Chancellor. And in a still unexplained twist in the saga, Facebook hired Chancellor, in about November 2015, which was soon after some of its own staffers had warned internally about the "sketchy" business Cambridge Analytica was conducting on its ad platform. Chancellor has never spoken to the press and subsequently departed Facebook as quietly and serendipitously as he arrived.

In a concise statement summing up its legal action against Facebook the OIAC writes:

Facebook disclosed personal information of the Affected Australian Individuals. Most of those individuals did not install the “This is Your Digital Life” App; their Facebook friends did. Unless those individuals undertook a complex process of modifying their settings on Facebook, their personal information was disclosed by Facebook to the “This is Your Digital Life” App by default. Facebook did not adequately inform the Affected Australian Individuals of the manner in which their personal information would be disclosed, or that it could be disclosed to an app installed by a friend, but not installed by that individual.

Facebook failed to take reasonable steps to protect those individuals’ personal information from unauthorised disclosure. Facebook did not know the precise nature or extent of the personal information it disclosed to the “This is Your Digital Life” App. Nor did it prevent the app from disclosing to third parties the personal information obtained. The full extent of the information disclosed, and to whom it was disclosed, accordingly cannot be known. What is known, is that Facebook disclosed the Affected Australian Individuals’ personal information to the “This is Your Digital Life” App, whose developers sold personal information obtained using the app to the political consulting firm Cambridge Analytica, in breach of Facebook’s policies.

As a result, the Affected Australian Individuals’ personal information was exposed to the risk of disclosure, monetisation and use for political profiling purposes.

Commenting in a statement, Australia's information commissioner and privacy commissioner, Angelene Falk, added: “All entities operating in Australia must be transparent and accountable in the way they handle personal information, in accordance with their obligations under Australian privacy law. We consider the design of the Facebook platform meant that users were unable to exercise reasonable choice and control about how their personal information was disclosed.

"Facebook’s default settings facilitated the disclosure of personal information, including sensitive information, at the expense of privacy. We claim these actions left the personal data of around 311,127 Australian Facebook users exposed to be sold and used for purposes including political profiling, well outside users’ expectations.”

Reached for comment, a Facebook spokesperson sent this statement:

We’ve actively engaged with the OAIC over the past two years as part of their investigation. We’ve made major changes to our platforms, in consultation with international regulators, to restrict the information available to app developers, implement new governance protocols and build industry-leading controls to help people protect and manage their data. We’re unable to comment further as this is now before the Federal Court.