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Buenos Aires vs. Worldcoin: Provincial Government Seeks Penalties, Citing Consumer Rights Violations

Authorities of Buenos Aires crack down on Worldcoin for abusive clauses and improper data handling

The provincial government of Buenos Aires has formally charged Worldcoin with violating consumer protection laws by incorporating "abusive clauses" in its user agreements. These clauses reportedly allow Worldcoin to interrupt services without offering repairs or reimbursements and force users to waive rights to collective complaints. Additionally, the agreements subject Argentine residents to Cayman Island laws and mandate arbitration in California—practices that the government claims contravene Argentina’s Civil and Commercial Code.

Ariel Aguilar, Buenos Aires’ Undersecretary of Commercial Development and Investment Promotion, highlighted concerns about Worldcoin's practices regarding data handling. Specifically, the company has been criticized for not adequately informing users under 18 about service restrictions and for storing Argentine users' private data in Brazil. This latter point raises significant issues about the "use, protection, and storage" of biometric data, which includes sensitive information from users' faces and eyes.

Broader context and potential consequences

These charges follow similar actions taken in the EU, where Spain and Portugal have also raised concerns about Worldcoin's data practices, leading to temporary data collection bans. While Buenos Aires has not issued a ban, it has urged Worldcoin to align its terms with local regulations to avoid future legal complications.

If Worldcoin is found guilty of these charges, it could face a fine of up to 1 billion Argentine pesos (approximately $1.2 million). This development is part of a series of privacy controversies surrounding the company, which has claimed its operations are fully legal and recently introduced transparency measures praised by figures such as Ethereum creator Vitalik Buterin.

Worldcoin, founded by Sam Altman, CEO of OpenAI and chairperson of Tools for Humanity, finds itself at a critical juncture, needing to address these legal challenges while maintaining its operations across various jurisdictions.