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Hungary's competition watchdog slaps $4 million fine on Facebook

Christian Fernsby |
The Hungarian Competition Authority (GVH) imposed a 1.2 billion Hungarian forint (4 million U.S dollars) fine on Facebook.

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The fine is the biggest ever levied by the office in a consumer protection case, GVH said, quoted by the Hungarian news agency MTI.

"Facebook Ireland breached the law when it advertised its services as free of charge on its website," GVH argued.

"The clients did not have to pay for using the services but they generated a business profit for the company through their user activities and data, paying, in fact, for the services," GVH said.

GVH noted that similar decisions have been made in the United States and Europe, and that it took into account that Facebook, pressed by the European Commission and the consumer protection authorities of the European Union (EU) member states, has globally updated its terms of service in April 2019.

"The essence of Facebook's business model is to attract consumers by sharing content on the site, gathering detailed information about their interests, behaviors and shopping habits. With this data, Facebook sells targeted advertising to its business clients and delivers ads between posts to consumers," GVH explained.

"The 'free and anyone can join', 'free and always will be' messages displayed on the registration page distract the consumer from the compensation he or she undertakes, its scope and its consequences. The misleading claims were displayed on the landing page from January 2010 to August 12, 2019, and in the Help Center until October 23, 2019," GVH noted.

Several users are not aware of the scope or value of the information they provide and GVH underlined that average users typically do not read the terms and conditions of online platforms.

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