Italian Regulator issues record fine to Facebook

Italy’s consumer regulator is fining Facebook over £8 million, for concealing how they make money from their data. The fine comes after an investigation by the Italian Competition Authority (“ICA”) looked into alleged violations of the consumer code by Facebook.

According to the ICA, Facebook violated four of the consumer code regulations, they say: Facebook emphasises the free nature of the service, but not the commercial objectives that underlie the provision of the social network service, thus inducing users into making a transactional decision that they would not have taken otherwise (i.e., to register in the social network and to continue using it). The information provided is in fact general and incomplete and does not adequately make a distinction between the use of data to personalise the service (in order to connect “consumer” users with each other) and the use of data to carry out advertising campaigns aimed at specific targets.

The fine comes after Facebook was fined £500,000 by the UK’s ICO earlier this year for breaking data laws. The Italian regulator found that Facebook had breached articles 21, 22, 24 and 25 of the country’s consumer code by:

  • Misleading users in the sign-up process about the extent to which the data they provide would be used for commercial purposes.
  • Emphasising only the free nature of the service, without informing users of the “profitable ends that underlie the provision of the social network”, and so encouraging them to make a decision of a commercial nature that they would not have taken if they were in full possession of the facts.
  • Forcing an “aggressive practice” on registered users by transmitting their data from Facebook to third parties, and vice versa, for commercial purposes.

The regulator criticised Facebook for not providing it’s users a full explanation of how their data was being used and for not obtaining specific consent from users to do this. As an additional penalty, the Italian regulator wants Facebook to publish an apology to users on its website.

A spokesperson for Facebook said: “We are reviewing the Authority’s decision and hope to work with them to resolve their concerns. This year we made our terms and policies clearer to help people understand how we use data and how our business works. We also made our privacy settings easier to find and use, and we’re continuing to improve them. You own and control your personal information on Facebook.”

The fine is Facebook’s second since the Cambridge Analytica scandal at the beginning of the year. However the social media giant is facing further fines from regulators worldwide, including the US Federal Trade Commission. In addition, under the new General data Protection Regulation, Facebook is facing a fine of up to £1.25 Billion after a data breach which affected 50 million account holders.