Facebook suffers blow in Australia legal fight over Cambridge Analytica

Facebook has been dealt a blow in its fight to fend off Australian legal action surrounding the Cambridge Analytica scandal, with the tech giant failing to convince the federal court it does not carry out business in Australia.

In March, the Office of the Australian Information Commissioner (OAIC) sued Facebook for allegedly breaching the privacy of more than 300,000 Australians between March 2014 and May 2015.

The legal action related to revelations in the Guardian and Observer that Cambridge Analytica used Facebook data — including people’s names, dates of birth, emails, city locations, friends lists, page likes and, in some cases, messages — to influence voters.

Cambridge Analytica provided assistance to the Donald Trump campaign in 2016, among others.

The Australian privacy regulator’s case accuses Facebook of serious and repeated breaches of privacy law, saying its actions left the data of about 311,127 Australian Facebook users exposed to being sold and “used for purposes including political profiling, well outside users’ expectations”.

The proceedings were brought against Facebook Inc, the tech giant’s US entity incorporated in Delaware. Its other entity, Facebook Ireland Ltd, is registered in its European namesake.

Because both entities exist outside of Australia, the regulator had to convince a court it had a prima facie case that both companies carried out business in Australia and may have contravened Australia’s privacy laws.

The federal court ruled in April that such a case existed, and gave the OAIC leave to serve documents on Facebook’s US-based entity, Facebook Inc.

A month later, Facebook Inc applied to have the court’s ruling set aside.

Facebook Inc argued it did not carry out business in Australia at the time of the Cambridge Analytica scandal.

Facebook lost that argument on Monday, when Justice Thomas Thawley found against the company. Thawley is yet to deliver any reasons for his judgment.

But in a statement, the OAIC said the court was “satisfied that the commissioner had established a prima facie case that Facebook Inc was carrying on business in Australia, and was collecting and holding personal information in Australia at the relevant time”.

“While these matters remain to be established at trial, the court held the matters were sufficiently arguable to justify service outside of Australia and subjecting Facebook Inc to proceedings in Australia,” the OAIC said.

It said Facebook’s Irish entity had not applied to have the ruling set aside.

A Facebook spokeswoman said: “We are aware of the court’s decision today and we are reviewing it carefully.”

In the April ruling, the federal court said the evidence suggested that Facebook Ireland was the provider of the Facebook service to Australian users, making it responsible for the collection and storage of personal information of those users.

But it also said the evidence suggested that Facebook Ireland was providing the service to Australian users as an agent for the US-based Facebook Inc.

“The contractual relationship between Facebook Ireland and Facebook Inc is such that a prima facie case is also shown as against Facebook Inc,” the court ruled in April.

The data harvested by Cambridge Analytica was collected through a personality quiz app, named This is Your Digital Life.

Only 53 people in Australia installed the app, according to court documents. But the app was also able to access the data of friends.

The OAIC alleged the data of 311,127 Australians was exposed in total.

Each contravention of the Privacy Act brings a potential maximum penalty of $1.7m. The OAIC is alleging multiple breaches but has not indicated whether it will seek financial penalties for each affected user.

Originally published at https://www.theguardian.com on September 14, 2020.

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