The Australian Competition & Consumer Commission (ACCC) has instituted Federal Court proceedings against Meta Platforms, Inc. and Meta Platforms Ireland Limited, alleging that the Facebook subsidiaries engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures in breach of the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act). Meta is also alleged to have aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.
The ACCC is seeking declarations, injunctions, penalties, costs and other orders.
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 ACCC states that the schemes were scams, with the people featured in the ads neither approved or endorsing 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. 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 ACCC does not appear to have commented on the presence of the same ads in other digital platforms and indeed in online 'mainstream media'.
ACCC Chair Rod Sims comments
The essence of our case is that Meta is responsible for these ads that it publishes on its platform. 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.
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.
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 alleges 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.
The ACCC notes
Apart from resulting in untold losses to consumers, these ads also damage the reputation of the public figures falsely associated with the ads. Meta failed to take sufficient steps to stop fake ads featuring public figures, even after those public figures reported to Meta that their name and image were being featured in celebrity endorsement cryptocurrency scam ads.
