The Australian Competition and Consumer Commission (ACCC) has commenced proceedings against Facebook and a pair of its subsidaries at the Federal Court of Australia, alleging the companies engaged in "false, misleading, or deceptive conduct" when promoting the Onavo Protect VPN app.
"The ACCC alleges that, between 1 February 2016 to October 2017, Facebook and its subsidiaries Facebook Israel Ltd and Onavo, Inc. misled Australian consumers by representing that the Onavo Protect app would keep users' personal activity data private, protected and secret, and that the data would not be used for any purpose other than providing Onavo Protect's products," the ACCC said on Wednesday.
The consumer watchdog alleges that Facebook gathered and used "significant amounts" of user data for its commercial benefit.
"This included details about Onavo Protect users' internet and app activity, such as records of every app they accessed and the number of seconds each day they spent using those apps," the ACCC said.
"This data was used to support Facebook's market research activities, including identifying potential future acquisition targets."
The ACCC points to ads at the time that said data would be kept "secret" and "safe".
"Consumers often use VPN services because they care about their online privacy, and that is what this Facebook product claimed to offer. In fact, Onavo Protect channelled significant volumes of their personal activity data straight back to Facebook," ACCC chair Rod Sims said.
"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."
The watchdog said it was seeking declarations and pecuniary penalties in bringing the action.
The Onavo app was pulled from Apple's app store in 2018, after Cupertino asked for the app to be voluntarily pulled.
Onavo was purchased by Facebook in 2013.
Last week, Facebook suspended accounts linked to Vietnamese hacking group APT32.
A day earlier, the US Federal Trade Commission and a bipartisan coalition of over 40 state attorneys-general filed anti-trust suits against Facebook.
The FTC said in its lawsuit that Facebook initially tried to compete with Instagram on the merits by improving its own offerings, but it ultimately chose to buy Instagram to neutralise the direct threat posed by Instagram and make it more difficult for another personal social networking competitor to gain scale.
The lawsuits also allege companies that rebuffed offers to be acquired by Facebook -- or those that posed a competitive threat -- would subsequently be cut off from access to various key components within the social networking giant's network.
"For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users," New York Attorney-General Letitia James said.
"Almost every state in this nation has joined this bipartisan lawsuit because Facebook's efforts to dominate the market were as illegal as they were harmful. Today's suit should send a clear message to Facebook and every other company that any efforts to stifle competition, reduce innovation, or cut privacy protections will be met with the full force of our offices."