Hungarian Competition Authority slaps Facebook with €3.6 million fine for "It's free and always will be" tagline
The Hungarian Competition Authority (GVH) imposed the largest consumer protection fine in its history on Facebook for the tagline "It's free and always will be" that the social media company used until recently.
According to the GVH's press release issued on Friday, Facebook Ireland Ltd. broke the law by advertising their service as free on the social media site's landing page and support website. While users never actually paid any fees for the service, they generated profits for Facebook by using the website and providing the company with their data.
GVH says that the tagline "It's free and always will be" that Facebook used from January 2010 until August 2019 diverted consumers' attention from the fact that they "pay" for the service with their data, and also from the extent and consequences of this compensation.
GVH ruled that the tagline's message confused consumers, as it suggested that using the service carries no risks or obligations while actually requiring the consumer to make a multi-layered commitment which, due to the complexity of the data involved, is not entirely transparent either.
The press release states that many consumers do not even read the terms and conditions and, therefore, are unaware of the extent and value of the data they provide. The authority stressed that the consumers' belief that a service is free of charges and risks has an adverse effect on their transactional decisions, and therefore, on real economic processes as well.
GVH determined the size of the fine based on a part of Facebook's ad revenues realised in Hungary, and also took into account the fact that the company had since removed the offending tagline from their landing page and help centre.
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