Buenos Aires charges Worldcoin with consumer law violations, warns of $1.2 million fine

The provincial government of Buenos Aires has formally accused Worldcoin of violating consumer laws through “abusive clauses” in its user agreement.

According to the notice, Worldcoin’s unfair agreement allegedly allows it to interrupt services without offering repair or reimbursement.

The government also claims that Worldcoin requires users to surrender their rights to collective complaints and instead applies Cayman Island laws to residents of Argentina.

Furthermore, any disputes supposedly must be resolved through arbitration in California. Worldcoin’s application of outside regulations allegedly violates Argentina’s Civil and Commercial Code.

Access by minors and data deletion

The provincial government described the results of audits it performed on Worldcoin and raised two complaints. Firstly, the company does not have an age disclaimer notifying users that people under 18 cannot access the service.

Secondly, Worldcoin stores private data about Argentine users internationally in Brazil. It linked this issue to contradictory information about the “use, protection, and storage” of biometric data collected from the faces and eyes of Argentine users.

Finally, data deletion is an issue. Ariel Aguilar, Buenos Aires’ Undersecretary of Commercial Development and Investment Promotion, questioned whether Worldcoin could eliminate biometric data.

If the charges are proven, Worldcoin will pay a fine of up to 1 billion Argentine pesos ($1.2 million). Buenos Aires says the firm is currently only exposed to the fine.

Past privacy controversies

The government’s allegations against Worldcoin follow similar actions in the EU in which Spain and Portugal filed charges against the firm. All three sets of allegations are somewhat comparable, as they address data collection from minors, user consent, and data ownership.

Spain and Portugal also imposed three-month data collection bans on Worldcoin. Buenos Aires did not describe such a ban in its latest announcement but instead asked the company to adapt its terms to comply with the region’s current regulations.

Amid controversy, Worldcoin declared its operations fully legal in March. It also announced transparency improvements that garnered praise from Ethereum creator Vitalik Buteirn.

Worldcoin is known for being founded by Sam Altman, CEO of OpenAI. Altman is chairperson of Tools for Humanity, a software and hardware development firm that supports Worldcoin.

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