Buenos Aires City Accuses Worldcoin of Predatory Practices, Threatens Hefty Fine

AbstractThe Buenos Aires provincial government has accused Worldcoin, a US-based iris-scanning company, of violating consumer rights. The complaint alleges the firm's contracts contain "abusive clauses" and lack proper protection for users' personal data, including minors'. Worldcoin faces potential fines if found guilty by the government, which is also concerned about the company's data storage practices and use of foreign laws to govern its services in Argentina.

Buenos Aires Accuses Worldcoin of Predatory Practices, Threatens Hefty Fine

In a scathing indictment, the Buenos Aires provincial government has leveled serious accusations against Worldcoin, a U.S.-based iris-scanning company, alleging a litany of consumer rights violations and abusive contract clauses. The company, which entices individuals with cryptocurrency tokens in exchange for their biometric data, now faces a potential fine of AR$1 billion (approximately US$1.1 million).

The complaint, filed by the provincial production, science, and technological innovation ministry, accuses Worldcoin of a range of offenses, including:

• Breach of consumer protection laws: The company is alleged to have violated Argentina's consumer protection regulations, which safeguard individuals from unfair or deceptive business practices.
• Insufficient protection of private data: Worldcoin's handling of users' biometric data, particularly that of minors, has come under fire. The government alleges that the company has failed to adequately protect this sensitive information.

• "Abusive clauses" in contracts: The contracts signed by Worldcoin volunteers are said to contain clauses that are deemed abusive and illegal under Argentine law. These clauses include:

  • A provision allowing Worldcoin to terminate services without compensation or reimbursement.
  • A prohibition against class actions against the company.
  • A stipulation that disputes be resolved in California courts, contravening Argentine laws prohibiting local cases from being tried in foreign jurisdictions.

According to government audits, Worldcoin has failed to display signs indicating that volunteers must be over 18 years old. This omission has raised concerns that minors have unwittingly participated in the scanning process.

Moreover, the government's investigation has uncovered contradictory information regarding the storage of Argentine users' biometric data. While the company initially stated that this data would be stored in Brazil, subsequent statements have suggested that it may be stored elsewhere.

"Worldcoin has taken a cavalier approach to consumer rights and privacy in Argentina," said a spokesperson for the provincial government. "We will not tolerate such predatory practices and will hold the company accountable for its actions."

Worldcoin has responded to the allegations, claiming that it "complies with the highest personal data processing standards in the world." However, the company has acknowledged that it will now verify the age of all volunteers to prevent minors from participating. Additionally, it has agreed to allow volunteers to permanently erase their iris codes upon request.

The case against Worldcoin highlights growing concerns over the use and abuse of biometric technology. As biometric data becomes increasingly prevalent, it is crucial for governments to establish clear regulations to protect privacy and safeguard consumers from exploitation.