Australian Watchdog Sues Meta Over Scam Crypto Ads on Facebook

Meta, formerly known as Facebook, is on the end of another lawsuit for allowing dodgy crypto advertising on its social media platform.

On March 18, the Australian Competition and Consumer Commission (ACCC) stated that it has instituted Federal Court proceedings against Facebook owner Meta Platforms, Inc.

The consumer watchdog alleges that Facebook “engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures.”

The dodgy ads involved cryptocurrency scams which appeared to be promoted by Aussie personalities such as businessman Dick Smith, television presenter David Koch, and former NSW Premier Mike Baird.

The ACCC also accused Meta of aiding and abetting, or knowingly permitting “false or misleading conduct and representations by the advertisers.”

Magnet for scammers

The social media platform has become a hotbed of scams, fake advertising, and spurious news over the past few years as its user base has grown. While the company claims to monitor and control what gets posted, too many of these types of things still slip through on an alarmingly regular basis.

ACCC Chair Rod Sims commented that “the essence of our case is that Meta is responsible for these ads that it publishes on its platform,” before adding:

“In one shocking instance, we are aware of a consumer who lost more than 650,000 AUD (US $480,000) due to one of these scams being falsely advertised as an investment opportunity on Facebook. This is disgraceful.”

He added that the company was aware that the celebrity-endorsed scam crypto ads were running on Facebook but did not take sufficient steps to address the issue. The public figures involved had reported the scams to Meta, but it failed to take action, he added.

Sims also stated that Meta uses technology and algorithms to target specific users with these ads, the ones most likely to react to them and click the fraudulent links.

“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 statement did not specify any damages sought but did state that the watchdog was seeking “declarations, injunctions, penalties, costs and other orders.”

Not the first time for Meta

According to Bloomberg, a Sydney-based spokeswoman for Meta said that the company doesn’t want scammy or misleading ads on Facebook because they “violate our policies and are not good for our community.” The comments come a little too late for those that have already lost money to these scams.

This isn’t the first time Facebook has been sued for allowing scam advertising on its platform. In August, a California class-action lawsuit accused the company of working with scammers by deploying misleading ads by harvesting private personal information from its users.

Last month, Australian billionaire Andrew Forrest sued Facebook over similar crypto scam ads fraudulently using his character to lure victims.

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