Hungary Has Fined Facebook For 'Misleading Consumers' Because It Promoted Its Service As 'Free'

from the uh,-it-is dept

Perhaps one of the more annoying points that people like to make when you point out that certain services are “free” is for them to point out, pedantically, “but you pay with your data” or some other such point. This is annoying because it’s (1) obvious and (2) not the point. When people say something is “free” in this context, they don’t mean “free of all consequences.” They mean “it doesn’t cost money.” However, it appears that Hungary’s Competition Authority is playing this pedantic game on a larger scale and has fined Facebook approximately $4 million because it advertises its services as “Free and anyone can join” on its front page:

The Hungarian Competition Authority claimed that this was misleading because Facebook profited from their data:

According to the competition authority, Facebook posted slogans such as ?Free and anyone can join? on its opening page and help center, claiming that its services were free of charge.

While true that users don?t pay a fee, they paid for their use of Facebook by driving profits to the company through its collection and use of their detailed data, such as consumer preferences, interests and habits, the authority said.

It added that, using that information, Facebook sold advertising opportunities to its clients, with the ads reaching consumers through their insertion among users? Facebook posts.

The authority said that the notices about the free use of Facebook ?distract consumers? attention? from the compensation they provide the company ? the provision and extent of their data and its consequences.

That seems… incredibly silly. First off, it’s ridiculously paternalistic and pedantic at the same time. Second, how many people were actually “fooled” by this. More to the point: if Facebook didn’t have that slogan on its front page, does anyone honestly believe that it would have changed whether or not someone signed up? Third, the service is free. Of course, Facebook is trying to make a profit, but in this context, everyone knows that what Facebook means by “free” is that you don’t have to pay money for it.

The article linked above claims that part of the size of the judgment was due to the fact that once the Hungarian agency began investigating Facebook, it changed that global “slogan.” I had no idea. I just looked and, yup:

Okay, so now it says “It’s quick and easy” rather than “It’s free and anyone can join.” Will that actually change anything? Seems doubtful. In the meantime, considering how pedantic and silly this whole thing is, I’m almost surprised that the Hungarian Competition Authority also didn’t fine the company for the “anyone can join” part, since that’s not “technically” true either, since the company has banned some people.

It’s one thing to say that Facebook should be regulated, or that it deserves to be fined over its behavior, but does anyone out there think this is a reasonable fine or will do anything to curb bad behavior?

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Comments on “Hungary Has Fined Facebook For 'Misleading Consumers' Because It Promoted Its Service As 'Free'”

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53 Comments
Anonymous Coward says:

Re: Free

Actually, Hungary is chasing the wrong thing here.

Signing up is free. This is a statement of fact; there is no cost (beyond a bit that Facebook absorbs) to sign up for Facebook. What happens after that comes with a cost.

However, the "anyone can join" is a bald-faced lie. If you’re under 13, you can’t join. If you’ve already abused the terms of service, you can’t join. If someone else sharing your IP has abused the terms of service, you can’t join. If you don’t have a compatible web browser or app, you can’t join. In fact, there are MANY groups of people who can’t join Facebook.

So I think the solution is obvious. They need to make a few changes to their slogan to make the statement clear:

"SIgn Up: The sign-up is free for anyone in our target demographic. The data we harvest after that is priceless."

This comment has been deemed insightful by the community.
PaulT (profile) says:

Re: Re: Free

"What happens after that comes with a cost."

But not a monetary cost, which is the point of the article. If you pick up a free newspaper in the morning it obvious cost something, but it’s not a problem describing it as free to the person using it.

"If you’re under 13, you can’t join"

I have some examples of how you’re wrong in practice. Oh, they have to lie to Facebook in order to do this, but if they don’t get caught they can join and do whatever they want. Similarly, you’re supposed to use your real name and duplicate accounts are banned, but I have numerous examples of both rules being violated for many years without repercussions. Hell, I’ve had "friends" there who are either pets or inanimate objects.

"If you’ve already abused the terms of service, you can’t join."

This is a problem?

"If someone else sharing your IP has abused the terms of service, you can’t join"

They have no process to allow for the fact that the majority of the public use leased IPv4 addresses? That seems rather silly, especially as people will often be using connections that are inherently the most shared (public wifi, school/work connections, etc.).

"If you don’t have a compatible web browser or app, you can’t join."

That’s also stretching for a point. People who don’t have internet also can’t join, neither can dead people. How specific do they need to be?

This comment has been deemed insightful by the community.
Wyrm (profile) says:

While true that users don’t pay a fee,…

So they admit it’s free.

… they paid for their use of Facebook by driving profits to the company

Which is a well-known business model.

As long as you don’t pay a fee, it’s free for you. How the company otherwise generates revenue doesn’t change this fact. They might want FB to better disclose what they do with the data you provide (for free again), but that’s the point of privacy laws. Technically, advertising that the service is free is not a lie.

If that is their new fight, there are way worse offenders than FB. Games that advertise being "free to play", but push you very hard to spend in micro-transactions are often way more misleading than a service that keeps its promise of not charging you a dime.

Anonymous Coward says:

Re: Re:

The term "free" does not refer only to money, and its historical antecedents may well predate money. Wikitionary defines pay as "To give money or other compensation to in exchange for goods or services", for example; and gratis as "out of favor or kindness, without recompense or compensation". Bartering, while not nearly as popular as in the past, is still a form of payment considered taxable by the IRS.

With Facebook, perhaps the compensation isn’t defined formally enough to be considered a payment. You can, after all, create an account and give them no information after that point. But Hungary evidently disagrees, and that’s not as absurd as you’re making it out to be. Few people would say Facebook are providing the service purely out of kindness.

Wyrm (profile) says:

Re: Re: Re:

In my opinion, that is still not the right definition here.

The reason FB users provide data is not to "pay" Facebook, but because it’s data they want to share… though they might not understand clearly how broadly this data will be shared.
FB uses the data you provide for your own reasons in ways that let them get paid in other ways. Banks mostly work the same way with your money.

As I see it, it’s more of a "we have common interest in sharing your data" than "we provide you with a service to share your data in exchange for… your data".

You mention that governments can even tax bartering, but there is nothing to tax here between the customer and the service provider. There are taxable amounts, but that is between FB and its business customers. It’s not "gratis" by your definition because there is a profit motive. It just happens not to come from the users.

Wyrm (profile) says:

Re: Re: Re: Re:

As a note, I don’t disagree with the idea that FB made things unclear on purpose and are probably abusing the data they receive from users.

I just wholeheartedly disagree with Hungary on suing FB for the word "free". That seems to me like just a twisted means to a possibly justified end. They wanted to have them guilty of something so they latched on to this one word.

David says:

I'm with the pedants.

"Free" for me means "no strings attached". And with Facebook, a whole swamp is attached. You cannot even delete an account once you create it, so joining is a step you cannot ever undo. Something with terminal and permanent consequences just does not fit the idea of "free", even when just using the "free beer" standard.

The U.S. anthem talks about the "the Land of the Free, and the Home of the Brave" and I rather doubt that it uses "Free" in the same sense as Facebook does.

Anonymous Coward says:

Re: Re: Re: I'm with the pedants.

that’s a payment because you have to give labor in return. you don’t have to give facebook anything to earn your account. you don’t have to create a single post or let it access any data (except that which is used in account creation, but if that counts then literally nothing is free because even a "no-strings-attached" beer from me requires you to give me your address so i can send it to you)

PaulT (profile) says:

Re: I'm with the pedants.

""Free" for me means "no strings attached""

Then you use a definition of the word that a lot of people do not use.

"The U.S. anthem talks about the "the Land of the Free, and the Home of the Brave" and I rather doubt that it uses "Free" in the same sense as Facebook does."

Perhaps because if you spoke Spanish (for example) the anthem means "libre" and the Facebook promise means "gratis", which are very different concepts. It’s just that in English the same word has been chosen to describe both concepts for some reason.

David says:

Re: Re: I'm with the pedants.

It’s not "gratis" either:

Gratis Gra"tis (gr[a^]"t[i^]s or gr[=a]"t[i^]s), adv. [L.,
contr. fr. gratiis out of favor or kindness, without
recompense, for nothing, fr. gratia favor. See {Grace.}]
For nothing; without fee or recompense; freely; gratuitously.
[1913 Webster]

And Facebook is not "without recompense". As I said, Facebook does not qualify for "free" as in "free beer" either. I don’t have to hand over my ID and agree to getting advertisements and carrying advertisements on letters I send out for getting free beer.

ECA (profile) says:

why?

WE have been raised with the assumption that when something says Free*…and even Free…there is alwasy something that isnt.

when did the meaning of Free change? when did Free Require a *’ to have a Quarter page of explanation that YOU WILL PAY… Or that what you are getting is CRAP, and everything else on the list costs you money..
Gambling is free, (to Do) as its a choice, but you pay to make bets..
Breathing is free, but all the corps fill the air with pollution.
This site is free, but you deal with opinions you may not like..and a few adverts..
Every site on the net is free…to visit.. you may not even get past the first page, because it COSTS MONEY, signup and collection of your data, or Tons of adverts infecting your computer, with out your say.

The Only free in this Life, supposedly, is the Love of your mother….Sorry, Im wrong…Your DOG..(damn, wrong again(you need to feed the dog))
Water isnt even free anymore..And soon Oxygen wont be free..

Why are we in a world, that has created a new dictionary of meanings, and no one has give-in us a book, explaining there is no such word as Free.

I saw a Prize give-away for a Property seller company(sit thru a bunch of ??? to get the prizes) Its said you get ? AND ? if you attend. I had to call them up, nad ask, if we Do get ? and ?…and that if they knew that AND, means we get both..
The person on the phone was ecstatic that AND meant that we got 1 or the other… I suggested they go back to 3rd grade and look it up, or they would be in court trying to explain the difference..

Anonymous Coward says:

Re: why?

It says something about our English ancestors that so many different concepts are all huddled under the one word "free".

It would be interesting to see what FB actually says in Hungarian, and what that meaning actually conveys in Hungarian.

But right now, it says:

Regisztráció
Gyors és egyszerű.

Which translates as:

Sign Up
It’s fast and easy.

In English it says "quick and easy"

Now… English has even bigger problems with those words; "quick" means "alive" or "essence of life" as well as speedy, and "fast" means starving, permanently attached, and a few other things as well as speedy. And don’t get me started on easy.

Anonymous Coward says:

Re: Re:

Newsflash: people in Hungary speak Magyar, not English as their primary language.

Translations of free:

==adjective==

ingyenes: free, gratuitous

szabad: free, leisure, exposed, vacant, independent, permissible

kötetlen: go-as-you-please, free

fesztelen: unreserved, unstrained, informal, free, relaxed, shirt-sleeve

==adverb==
ingyenesen: free

==verb==
szabaddá tesz: free, clear, vacate, decontrol

Anonymous Coward says:

Gmail is free, there are free music streaming service,s ,
theres free tv over the air,
these services are supported by advertising,
Aimed at the users of the service .
Is there one person out there that can use a browser, a pc,or a phone,
and is waiting for a bill from facebook for using the service.
theres a cliche , if the service is free you are the product,
i use gmail and youtube,
I understand i get a free service, in return they get a chance to show me ads .
I have acess to millions of video,s and i can subscribe to channels,
based on gaming or tech news .

me ad,s or maybe use my data to target ad,s at me depending
on the items i search for .
If there was no ads, allowed on websites for non paying users
most of the internet would cease to exist.
the web would be limited to sites with a paywall,
or websites that take donations from users .

Anonymous Coward says:

Re: Not free

If you have to buy one to get another, it’s definitely not free

Indeed. It’s not free, it’s two for the price of one. At best. At worst, the vendor doubled the asking price for one before making the two for the price of one claim – so no benefit to the client at all.

And yes, the misleading "free" claims do need to be reigned in. The Internet is infested with online dating sites which claim to be "free to join" or free to place an ad, but conveniently forget to mention that it’s not free to read the ad, reply to the ad or retrieve the replies… or at least that info is dishonestly concealed until after the user wastes the time to create an extensive bio or profile.

If the "free" version of something is unusable, then it ain’t free.

The same could be said of the abuse of "in-game purchases". If it’s pay to play, it is not "free" or "complimentary".

PaulT (profile) says:

Re: Not free

"it’s definitely not free, it’s at no additional charge"

So, free on the condition that you buy one other item. It’s pretty clear so why make the advertising more unwieldy and complicated to get the same point across? "This product $2. Unless you buy 2, then it’s $1 each! If you buy 3 the price goes up to $1.33 recurring each, but if you but 4 it’s back to $1 each! "

R/O/G/S says:

Exactly how the Hungarian agency is more, or less paternalistic than any other government body holding big tech to community safety or other standards, is beyond me.

And its not like Facebook is a free pastry sample at a deli, or a Girl Scout cookie, or that it is,actually giving you anything free, except the illusion of free, when in fact it is really just a huge piece of spyware that has been linked to international mayhem.

So arguing Facebooks case for them (for free) seems disingenuous, considering that they are the biggest piece of spyware ever invented.

These companies and technologies should come with a warning label, and be fined at every opportunity for the most basic infractions of local law and custom.

R/O/G/S says:

Re: Re: Re:MAYHEM!

Mass shooters?Jasmine revolution?

And this sad situation:

https://theintercept.com/2017/12/30/facebook-says-it-is-deleting-accounts-at-the-direction-of-the-u-s-and-israeli-governments/

All of that has definitive, inarguable links to Facebook, and how the Intelligence community used it(and how Facebook worked with them) to push policy and agenda.

MAYHEM!

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