Facebook has lost an appeal involving the Cambridge Analytica scandal after the Federal Court rejected its claim it does not conduct business in Australia or store Australian information.
The Australian Information Commissioner is suing US-based Facebook Inc, now known as Meta, Facebook Ireland over the alleged breaching of 311,000 Australian user’s privacy.
About 53 Australian Facebook users are said to have disclosed personal information to a third-party app This Is Your Digital Life between March 2014 and May 2015.
The app developers then gained access to more than 300,000 Facebook friends of those users, and shared their personal information with Cambrdige Analytica which used it for political profiling purposes.
The Australian regulator alleges that Facebook Inc “committed serious, and/or repeated interferences with privacy in contravention of Australian privacy law”.
The Mark Zuckerberg-led social media giant argued these laws do not apply to Facebook Inc as the Facebook Ireland subsidiary was conducting the Australian business.
Further, Facebook Inc argued it did not collect or store people’s personal information in Australia.
Noel Hutley SC, acting for Facebook, submitted that the installation of cookies occurred from where Facebook Ireland – the arm that conducts this business – operated.
Mr Hutley also argued on the basis the digital company had no physical assets, customers or revenues in Australia, and that data processing services were located in the United States and Sweden.
Justice Tom Thawley dismissed this interlocutory application in September, and on Monday the full bench of the Federal Court upheld his decision.
Justices James Allsop, Nye Perram, and David Yates concluded “the means by which entities carry on business are constantly evolving”.
They also rejected the notion cookies “which makes Facebook work” were fixed at the location from which they were installed.
“An act may occur in more than one place, may be continuous, complex and multilateral, and not just physically instantaneous in one place,” Justice Allsop said.
Facebook Inc was ordered to pay the Australian regulator’s legal costs stemming from the appeal.
Australian Information Commissioner and Privacy Commissioner Angelene Falk said in a statement that she welcomed the decision and looked forward to the hearing of substantive matters.
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