Australian Watchdog Sues Facebook-Owner Meta Over Scam Ads

Australian Competition and Consumer Commission has taken legal action against Facebook’s parent company Meta Platforms Inc. (FB), accusing the social media giant of allowing scam ads to target users with fake celebrity endorsements.

According to the Australia’s consumer watchdog, “Meta aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.”

The ACCC alleges that this conduct was in breach of the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act).

The ACCC alleges that the ads, which promoted investment in cryptocurrency or money-making schemes, were likely to mislead Facebook users into believing the advertised schemes were associated with well-known people featured in the ads, such as businessman Dick Smith, TV presenter David Koch and former NSW Premier Mike Baird. The schemes were in fact scams, and the people featured in the ads had never approved or endorsed them.

The US company could face financial and other penalties.

“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” ACCC Chair Rod Sims said.

“It is a key part of Meta’s business to enable advertisers to target users who are most likely to click on the link in an ad to visit the ad’s landing page, using Facebook algorithms. Those visits to landing pages from ads generate substantial revenue for Facebook.”

The regulator also alleged 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 celebrity endorsement cryptocurrency scam ads were still being displayed on Facebook even after public figures around the world had complained that their names and images had been used in similar ads without their consent.

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