Australia Sues Facebook Over Scam Advertising
Australia has a challenging relationship with social media and has a history with both Google and Facebook over protecting local journalism and national news outlets.
Now, Facebook owner Meta has been sued by Australia’s competition watchdog for engaging in "false, misleading or deceptive conduct" by knowingly hosting the ads for bogus cryptocurrencies, the regulator said.
The Australian regulator is not alone in expressing concerns that the social media giant has failed to prevent scammers using its platform to promote fake ads with celebrities supposedly endorsing misleading products.
According to the commission, the adverts featured well-known Australians, including former New South Wales premier Mike Baird and businessman Dick Smith. But the high-profile personalities featured in the ads had never approved or endorsed them, it said.
Meta could face financial and other penalties. Meta vowed to defend itself, saying in a statement that it sought to stop scam ads by using technology to detect and block them. "We don't want ads seeking to scam people out of money or mislead people on Facebook, they violate our policies and are not good for our community," a Meta spokesperson said.
The Australian Competition and Consumer Commission (ACCC) says the ads in question used Facebook's algorithms to target susceptible users and featured bogus quotes by Australian celebrities.
Identities used without permission included former New South Wales Premier Mike Baird, prominent TV host David Koch and millionaire entrepreneur Dick Smith. "The essence of our case is that Meta is responsible for these ads that it publishes on its platform," ACCC chairman Rod Sims said in a statement on Friday.
The legal action, filed in the Federal Court of Australia, alleges Meta did this knowingly and failed to prevent the scams even after objections were raised by celebrities. "In one shocking instance, we are aware of a consumer who lost more than A$650,000 (£360,000; $480,000) due to one of these scams being falsely advertised as an investment opportunity on Facebook. This is disgraceful," Mr Sims said.
Recently Andrew Forrest, a billionaire in Australia started a criminal case against Meta over fake ads that used his image. While Dr Forrest accuses the tech giant of breaking anti-money laundering laws, Meta, which also owns Instagram and Whatsapp, made $115bn in global advertising revenue in 2021.
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