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ACCC launches proceedings against Meta

Australia’s chief competition regulator has initiated proceedings in the Federal Court against Facebook’s owner, Meta Platforms, for publishing scam celebrity crypto ads.

user iconJerome Doraisamy 21 March 2022 Big Law
ACCC launches proceedings against Meta
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The Australian Competition and Consumer Commission (ACCC) has filed proceedings against Meta Platforms Inc and Meta Platforms Ireland Limited, alleging that they engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures.

ACCC will allege that the conduct was in breach of the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act. Moreover, the regulator will submit that Meta aided and abetted, or was knowingly concerned in false or misleading conduct and representations, by the advertisers.

The ads promoting investment in cryptocurrency or money-making schemes, ACCC said in a statement, “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,” it said.

Those ads contained links taking Facebook users to fake media articles that contained quotes attributed to the aforementioned public figures, endorsing cryptocurrency or money-making schemes. Those 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”, ACCC said.

According to ACCC chair Rod Sims, the regulator’s case will be that Meta is responsible for the ads published 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,” he posited.

Meta was aware, the ACCC’s statement continued, that the celebrity endorsement cryptocurrency scam ads were being displayed on Facebook but did not take sufficient steps to address the issue.

Those scams were still being displayed on Facebook, the regulator noted, “even after public figures around the world had complained that their names and images had been used in similar ads without their consent”.

Mr Sims: “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.

“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.”

Facebook failed, Mr Sims went on, to prevent the publication of fake ads even after the celebrities reported similar false, misleading or deceptive ads to Meta.

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

The ACCC is seeking declarations, injunctions, penalties, costs and other orders.

Jerome Doraisamy

Jerome Doraisamy

Jerome Doraisamy is the managing editor of Lawyers Weekly and HR Leader. He is also the author of The Wellness Doctrines book series, an admitted solicitor in New South Wales, and a board director of the Minds Count Foundation.

You can email Jerome at: jerome.doraisamy@momentummedia.com.au 

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