The provincial government of Buenos Aires has lodged a formal accusation against Worldcoin, alleging that the company has violated consumer protection laws through the inclusion of “abusive clauses” in its user agreement. These allegedly unfair terms reportedly give Worldcoin the ability to halt services without any obligation to provide repair or reimbursement to its users. Additionally, the government contends that Worldcoin mandates users to waive their rights to pursue collective complaints and subjects them to Cayman Island laws, which is deemed inappropriate for residents of Argentina. Moreover, any disputes must supposedly be settled through arbitration in California, a practice that runs counter to Argentina’s Civil and Commercial Code.
Upon conducting audits of Worldcoin, the provincial government highlighted two primary concerns. Firstly, the absence of an age disclaimer in the user agreement fails to notify individuals under the age of 18 that they are ineligible to access the service, raising issues related to compliance with age restrictions. Secondly, Worldcoin’s storage of private data of Argentine users in Brazil poses a significant privacy risk. This data collection is linked to ambiguous information regarding the use, protection, and storage of biometric data obtained from the faces and eyes of Argentine users, raising questions about data security and privacy protection measures. Additionally, the government expressed skepticism about Worldcoin’s ability to delete biometric data, highlighting potential challenges in data management practices.
If the allegations against Worldcoin are substantiated, the company could face penalties of up to 1 billion Argentine pesos ($1.2 million). Currently, Worldcoin is solely exposed to the financial penalty, pending the outcome of the investigation. The government’s actions against Worldcoin align with similar legal challenges in the European Union, where Spain and Portugal have also filed charges against the firm for comparable violations related to data collection from minors, consent issues, and data ownership discrepancies. In response to these allegations, Spain and Portugal imposed temporary bans on data collection by Worldcoin, demonstrating a unified stance on enforcing data protection regulations.
Despite the legal scrutiny and regulatory challenges, Worldcoin has maintained its stance on the legality of its operations, asserting full compliance with existing laws and regulations. In an attempt to address transparency concerns and enhance its reputation, the company announced improvements in its transparency practices, earning accolades from prominent figures in the tech industry, including Ethereum creator Vitalik Buterin. Worldcoin, founded by Sam Altman, CEO of OpenAI, and supported by Tools for Humanity, a technology development firm, faces ongoing legal hurdles as it navigates the complex regulatory landscape in Argentina and other jurisdictions.