Australian regulator sues Meta over cryptocurrency fraud

• Australia sued Meta because Facebook allowed fraudulent ads featuring stars to be posted.
• The ads contained links that led Facebook users to fake articles quoting public figures who allegedly expressed support for cryptocurrencies.

The Australian Competition and Consumer Commission (ACCC) alleges that the social media network deceived users of its platform by publishing misleading crypto posts featuring local celebrities.

Сase details

The ACCC claims that Meta knowingly allows fraudulent ads to be published on behalf of public figures and businessmen. They often include famous Australian entrepreneur Dick Smith, broadcaster David Koch, former politician Michael Baird, and Australian billionaire Andrew Forrest. Forrest had previously filed claims against Facebook in this regard. But they were rejected because the user had agreed to the terms of service exempting the social network from liability.

Related: Aussie billionaire takes Facebook to court over crypto scams as parent company stock tanks 22%

However, the ACCC believes that the tech giant Meta is involved in illegal activities because it allows scammers to publish ads about cryptocurrencies using the names of other people who do not actually endorse or support these schemes. ACCC Chairman Rod Sims believes that Meta should be responsible for the ads published on its platform. The company is obliged to prevent the publication of spam and remove misleading ads for cryptocurrencies so that users do not fall prey to scammers. In addition to losses for users, such ads damage the business reputation of public figures associated with them.

In Meta, advertisers can target users who are most likely to click on the link in the ad to go to the ad’s landing page using Facebook algorithms. Landing page visits from ads generate significant revenue for Facebook,

The main claims to Meta

The chairman of ACCC stated that the main claim and essence of the lawsuit from Australia, first of all, is that Meta should be responsible for any advertising on its platform. Also according to the claims of this party, the company knew that there were cryptocurrency ads with cheaters and they were broadcasted on Facebook. However, the company decided not to take any action to fix the problem.

However, it doesn’t matter what kind of ads. The main problem is that they are fraudulent. For example, cryptocurrency has absolutely nothing to do with it. The ads contained links that led Facebook users to fake articles quoting public figures who allegedly expressed support for cryptocurrencies. Users were encouraged to sign up and then contacted by scammers, convincing them to invest in cryptocurrency schemes. The ACCC alleges that this violates the Australian Consumer Law (ACL) and the Australian Securities and Investments Commission (ASIC) Act.

Response from Meta

“We do not want any ads that are aimed at developing fraudulent schemes and stealing money from ordinary people to be on the platform of Facebook – such posts violate the laws of the platform and do not bring any benefit, but only harm”. This is a statement from a spokesperson for Meta in Sydney. As a result, the platform has promised to review the recent ACCC filing and intend to defend the proceedings.

Similar situations are occurring on the YouTube platform. In 2020, Ripple CEO Brad Garlinghouse sued YouTube for publishing fraudulent videos about XRP giveaways in his name.

Also read: Ripple sues YouTube for damage to reputation and financial losses