The Australian Competition and Consumer Commission is suing Meta Platforms, alleging that the social media giant misled customers by publishing scam advertisements.
On March 18, 2022, the Australian Competition and Consumer Commission filed a suit against Facebook owner Meta Platforms, alleging that the social media company failed to prevent scammers from using its platform to spread fraudulent ads featuring celebrities.
According to the Australian Competition and Consumer Commission,(ACCC) the ads encouraged cryptocurrency investments and linked to false media articles endorsing the scams.
The ACCC stated that the complaint filed in Federal Court alleges that Facebook "aided and abetted or was knowingly concerned in fraudulent or deceptive conduct and representations by advertisers."
"The essence of our argument is that Meta is liable for the ads that it publishes on its platform,"said Rod Sims, the Australian Competition and Consumer Commission's Chairperson. "It is alleged that Meta was aware that... scam ads were being displayed on Facebook but did not take adequate actions to address the problem."
The advertisements, which promoted cryptocurrency or money-making schemes, were likely to deceive Facebook users to believe the advertised schemes were linked to well-known personalities included in the ads, such as businessman Dick Smith, TV host David Koch, and former NSW Premier Mike Baird.
The schemes were all scams, and none of the people featured in the advertisements had ever approved or endorsed them. According to the ACCC, the ads contained links that directed Facebook users to a fake news article with remarks ascribed to the public figure featured in the ad, apparently advocating a cryptocurrency or money-making scheme.
"We are aware of a consumer who has lost almost A$650,000 ($480,000) as a result of one of these scams," Sims said.
Consumers reported $99 million in losses to cryptocurrency investment scams in 2021, according to Scam watch data.
Last month, Australian iron ore magnate Andrew Forrest, chairman of Fortescue Metals Group, filed criminal charges against Facebook for scam advertising that used his image to promote cryptocurrency schemes.
Financial fraud complaints are normally handled by the corporate regulator, the Australian Securities and Investments Commission (ASIC). The ACCC said it was given temporary powers to initiate the complaint since it is pursuing financial penalties.
Facebook established a programme earlier this week to help train Australian political candidates and influencers on cyber security in order to prevent the spread of potential misinformation during the country's forthcoming federal election campaign.
