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Meta Sued by Australian Regulator for Allegedly “Misleading” Crypto Ads

Australia’s competition authority has taken Meta to court for allegedly allowing deceptive cryptocurrency advertising on Facebook, in a test case of the parent group’s liability for acts harming consumers on the social media platform.

The Australian Competition and Consumer Commission alleged that Meta violated consumer and investment laws and that the US company “encouraged and encouraged, or knowingly engaged in, false or misleading conduct and representations”.

The regulator’s legal action follows a separate case brought by Andrew Forrest, the Australian mining tycoon who sued Meta this year after his image was used to promote cryptocurrency schemes without his consent.

Rod Sims, chairman of the ACCC, has identified “dark patterns” in the online commerce and subscription market that are causing harm as the organization’s next target.

The alleged scams began in 2019 and used images of well-known Australians on Facebook to link to fake media articles urging consumers to sign up for cryptocurrency schemes. The Facebook users were then subjected to high-pressure selling techniques.

The targets suffered “countless losses”, according to Sims, who said one person was allegedly tricked into spending AUD$650,000 ($477,000).

The ACCC said Meta generated “significant revenue” by linking Facebook to the fake media reports and its technology allowed “unscrupulous scammers” to target consumers who were most likely to engage with the ads.

It also said the promotions continued to appear even after some of the celebrities publicly complained about the use of their likenesses. “The gist of it in our case is that Meta is responsible for those ads that it publishes on its platform,” Sims said.

Meta said it has been working with the ACCC so far and will review the federal court filing.

“We don’t want ads that aim to scam people out of money or mislead people on Facebook – they’re against our policies and aren’t good for our community. We use technology to detect and block fraudulent ads and work to stay ahead of scammers’ attempts to bypass our detection systems,” the company said.

About 5 percent of Facebook monthly active users were fake accounts in the fourth quarter of 2021, and according to the company, 1.7 billion such accounts were closed during that period.

The ACCC’s case is its latest attempt to crack down on digital platforms, after last year it introduced a news negotiation system that effectively forced Meta and Google to pay media companies for their journalism.

The lawsuit was announced on the last day of Sims’ 11-year tenure at the helm of the regulator. He is credited with transforming the ACCC into a watchdog of global influence by introducing the Code of Negotiation on News and publishing research on digital platforms used by other national regulators.

Sims is succeeded by Gina Cass-Gottlieb, a competition attorney.

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https://www.ft.com/content/132c7877-bd74-4957-925b-414f12ec6aa4 Meta Sued by Australian Regulator for Allegedly “Misleading” Crypto Ads

Adam Bradshaw

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