Google and Apple are fined by Consumer Authority Procon on charges of unfair contractual terms

Comsumer’s Authority Procon-SP fined the companies Google Brasil Internet Ltda. and Apple Computer Brasil Ltda., owners of the Android and IOS app stores, respectively, for violation of the Consumer Protection Code and the Internet Civil Legal Framework after an investigation found that there were unfair contractual terms imposed by the Faceapp app on users. Faceapp is an application made available by Google and Apple stores that enables highly realistic face’s transformation in photographs through artificial intelligence. Its use became fever in Brazil shortly after its launch in July this year.

Procon’s charges involve the following conducts by companies: (i) making essential information about the app available in a foreign language only; (ii) sharing of user information; (iii) transfer of consumer data to countries with legislation other than local, resulting in waiver of consumer rights; and (iv) clauses that provide for arbitration as the compulsory dispute resolution alternative, meaning that potential disputes should be resolved in California, USA.

The fines imposed by Procon-SP are the highest ever applied in Brazil: Google’s R$ 9.964.615,77 (approximately USD 2.454.338,86), the maximum amount set by the Consumer Defense Code, and Apple’s R$ 7.744.320,00 (approximately USD 1.907.467,98). Companies can administratively challenge the decision before Procon-SP in two instances, litigate before courts or pay the fine, with a 30% discount if a single payment is made.