Meta sued for allegedly displaying scam ads using Australian public figures

According to the ACCC, one consumer lost AU$650,000 as a result of these scam ads.
Written by Campbell Kwan, Contributor

Australian businessman Dick Smith was one of the public figures who allegedly had their image used in scam ads.  

Image: Getty Images

Meta, the parent company of Facebook and Instagram, has been sued by Australia's consumer watchdog for allegedly publishing scam advertisements featuring prominent Australian public figures.

The Australian Competition and Consumer Commission (ACCC) said it initiated the legal proceedings against Meta as the company either allegedly aided and abetted in false or misleading representations by the scam advertisers or stood idly by as the ads continued to be displayed.

Of note in the ACCC's latest lawsuit is that its arguments are grounded on Meta being responsible for the ads it publishes on its platform.

"The essence of our case is that Meta is responsible for these ads that it publishes on its platform," ACCC Chair Rod Sims said.

"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."

According to the ACCC, Meta was aware that the celebrity endorsement cryptocurrency scam ads were being displayed on Facebook but did not take sufficient steps to address the issue despite it giving assurances to users that it would detect and prevent spam.

It alleges the images of businessman Dick Smith, TV presenter David Koch, and former New South Wales premier Mike Baird were used in the scam ads.

The continued displaying of these scam ads led to many users suffering losses and the reputation of various public figures being damaged, the ACCC claims.

In one instance of users falling prey to these scam ads, one person lost more than AU$650,000, Sims said.

Meta has said it will review the ACCC's lawsuit and intends to defend against the proceedings.

"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.

"We use technology to detect and block scam ads and work to get ahead of scammers' attempts to evade our detection systems. We've cooperated with the ACCC's investigation into this matter to date."

The lawsuit is similar to legal proceedings brought forward last month by iron ore magnate Andrew "Twiggy" Forrest, who has accused Meta of failing to prevent various scam ads containing his name and image.

In Forrest's lawsuit, the Australian billionaire has laid criminal allegations against Meta, which marked the first time the tech giant has ever faced such charges.

He's also launched a separate civil lawsuit against the company in the United States.

According to Forrest, both lawsuits were raised after he contacted the Facebook platform to prevent his image from being used to scam Australian users.

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