Australian consumer watchdog the ACCC is taking Facebook to court over an app it says collected and used personal data while claiming it would keep it safe and private.

In proceedings in the Federal Court, the Australian Competition and Consumer Commission will accuse Facebook Inc and two of its subsidiaries of false, misleading or deceptive conduct when promoting its free Onavo Protect mobile app, which offered a VPN service.

US-based Onavo Inc and Onavo Mobile, based in Israel, were mobile analytics companies acquired by Facebook in October 2013. Onavo Mobile became Facebook Israel.

The ACCC says the trio misled consumers by representing that the Onavo Protect app would keep users' personal activity data private, protected and secret, and that the data would not be used for any purpose other than providing Onavo Protect's products. In fact, the ACCC alleges, Onavo Protect collected, aggregated and used significant amounts of users' personal activity data for Facebook's commercial benefit. This included details about Onavo Protect users' internet and app activity, such as records of every app they accessed and the number of seconds each day they spent using those apps. The data was used to support Facebook's market research activities, including identifying potential future acquisition targets.

Chair Rod Sims says Facebook was collecting and using the very detailed and valuable personal activity data of thousands of Australian consumers through the app, for its own commercial purposes, "which we believe is completely contrary to the promise of protection, secrecy and privacy that was central to Facebook's promotion".

While VPN services are frequently used by people who care about online privacy - and that is what the product claimed to offer - Onavo Protect actually channelled significant volumes of personal activity data straight back to Facebook.

"We believe that the conduct deprived Australian consumers of the opportunity to make an informed choice about the collection and use of their personal activity data by Facebook and Onavo."

The Onavo Protect website stated that the app would "save, measure and protect" users' mobile data, while advertisements on Facebook's website and app included statements such as 'Keep it secret. Keep it safe... Onavo Protect, from Facebook'.

The ACCC is seeking declarations and pecuniary penalties.

Apple removed Onavo Protect from its App Store in 2018, and it later removed from the Google Play store and discontinued.

Concerns over the Onavo Protect app and how data was being used were expressed in the ACCC's Digital platforms inquiry final report.