In 2013, Facebook acquired Israeli tech firm Onavo for approximately $120 million. Marketed as a VPN designed to enhance privacy, reduce data usage, and secure online activity, Onavo was downloaded by over 33 million users who believed they were protecting their digital lives. Unbeknownst to them, the app served a different purpose: granting Facebook unprecedented visibility into user behavior across their mobile devices.
Through Onavo, Facebook could monitor which apps users opened, how long they used them, the websites they visited, and when—all under the guise of privacy protection. This behavioral data was instrumental in tracking emerging competitors, including Houseparty, YouTube, Amazon, and most notably, Snapchat.
When Snapchat’s encrypted traffic limited Facebook’s visibility, the company initiated “Project Ghostbusters.” This covert operation involved leveraging Onavo’s infrastructure to install root certificates on users’ devices, enabling Facebook to decrypt and analyze traffic from Snapchat by impersonating its servers. The insights gained influenced Facebook’s strategic decisions, including its failed $3 billion acquisition offer for Snapchat. Following Snapchat’s rejection, Facebook launched Instagram Stories, a near-identical clone of Snapchat’s core feature.
After Apple removed Onavo from the App Store in 2018 due to privacy violations, Facebook relaunched a similar program under the name “Facebook Research” (internally known as Project Atlas). This version paid users—including teenagers—as much as $20 per month to install an app with deep-level access to their mobile activity. Apple responded by revoking Facebook’s enterprise developer certificates, disrupting the company’s internal app operations on iOS.
Regulatory scrutiny followed. In 2020, the Australian Competition and Consumer Commission (ACCC) filed a lawsuit against Facebook, alleging deceptive conduct related to Onavo’s privacy claims. In 2023, Meta subsidiaries were fined AUD 20 million—one of the rare instances of a tech giant facing financial penalties for misleading users.
Why It Matters
The Onavo case highlights how data can be weaponized by dominant tech platforms. Facebook used a privacy-branded tool to engage in surveillance, clone rising competitors, and shape its market strategy. It also underscores the ethical risks of targeting young users for data collection and the need for robust regulatory oversight.
Even years later, Onavo remains a landmark example of how the pursuit of data can blur the lines between innovation and exploitation.
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