Australia’s consumer watchdog is taking Facebook’s owner to court, alleging Meta engaged in misleading conduct by publishing scam celebrity crypto ads on its platform.
In a statement made on Friday, the Australian Competition and Consumer Commission (ACCC) said it has instituted Federal Court proceedings against Meta Platforms, Inc and Meta Platforms Ireland Limited, alleging Meta “engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures”.
The ACCC alleges that this conduct was in breach of the Australian Consumer Law or the Australian Securities and Investments Commission Act.
So what’s this all over?
It is alleged the ads, which appeared in 2019, promoted investment in cryptocurrency or money-making schemes, and were likely to mislead Facebook users into believing the advertised schemes were associated with the well-known people featured in the ads.
The ads, the ACCC says, featured businessman Dick Smith, TV presenter David Koch, former NSW Premier Mike Baird and Aussie billionaire Andrew “Twiggy” Forrest. Forrest, a mining magnate and chairman of iron ore giant Fortescue Metals, launched criminal action against Meta in February, alleging the social media platform failed to stop crypto scam artists from serving up the fake ads using his image.
According to the ACCC, the schemes were in fact scams, and the people featured in the ads had never approved or endorsed them.
“The ads contained links which took Facebook users to a fake media article that included quotes attributed to the public figure featured in the ad endorsing a cryptocurrency or money-making scheme,” the ACCC explains. “Users were then invited to sign up and were subsequently contacted by scammers who used high pressure tactics, such as repeated phone calls, to convince users to deposit funds into the fake schemes.”
The essence of the ACCC’s case is that Meta is responsible for these ads that it publishes on its platform. It is alleged by the ACCC that Meta was aware that the celebrity endorsement cryptocurrency scam ads were being displayed on Facebook but did not take sufficient steps to address the issue.
The watchdog says it’s aware of one person who lost more than $650,000 as a result.
“We allege that the technology of Meta enabled these ads to be targeted to users most likely to engage with the ads, that Meta assured its users it would detect and prevent spam and promote safety on Facebook, but it failed to prevent the publication of other similar celebrity endorsement cryptocurrency scam ads on its pages or warn users,” ACCC chair Rod Sims said.
“Meta should have been doing more to detect and then remove false or misleading ads on Facebook, to prevent consumers from falling victim to ruthless scammers.”
The ACCC is seeking declarations, injunctions, penalties, costs and other orders from Meta in relation to the alleged scams.