These serious and repeated interferences with privacy contravened Australian law and left the information at risk of being used by companies like the now defunct Cambridge Analytica for political profiling and also by other third parties, the case alleges.
Nearly two years ago, when the Cambridge Analytica scandal came to light, it was revealed that the personal details of 311,027 Australians were among the data of a total of 87 million users of Facebook that leaked to the voter-profiling company.
At the time Australian Information Commissioner and Privacy Commissioner Angelene Falk issued a statement saying that an investigation would be undertaken to find out if Facebook violated the Australian privacy act. This case appears to be the result of her findings.
“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,” Australian Information Commissioner and Privacy Commissioner Angelene Falk said in a statement on Monday.
“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.”
The case claims that from March 2014 to May 2015, Facebook disclosed Australians' personal information to the app in question, breaching Australian Privacy Principle 6.
It also alleges that Facebook did not take reasonable steps to protect this information from unauthorised disclosure, a violation of Principle 11.
According to APP 6, "if an APP entity holds personal information about an individual that was collected for a particular purpose, the entity must not use or disclose the information for another purpose (the secondary purpose), unless the individual has consented to the use or disclosure’ (or another exception applies)".
APP 11 says, "if an APP entity holds personal information, the entity must take such steps as are reasonable in the circumstances, to protect the information from misuse, interference and loss, and from unauthorised access, modification or disclosure".
As per the penalty rate applicable in 2014-15, the Court can fine an entity $1.7 million for each serious offence.
Enza Iannopollo, a senior analyst covering privacy, security & risk at research outfit Forrester, commented: "The Australian regulator is taking action on a case that has been already assessed and fined elsewhere.
"Regulators such as the UK's Information Commissioner's Office and the US Federal Trade Commission have already fined Facebook for its data-sharing practices in the context of the Cambridge Analytica scandal."
Iannopollo added that the current investigation was further evidence of a practice that was not only against data protection rules, but also poor from a customer, business responsibility, and ethics perspective.
"Forrester data suggests that consumers rate business' commitment to data privacy and confidentiality as one of the most important social responsibilities a business has," she said.
"The outcome of the investigation should account not only for the breach of the rules, but also for a major breach of consumers' trust and their data privacy expectations."