Australia's Competition and Consumers Commission (ACCC) recently announced that it is suing Meta for breaching Australia's consumer and investment laws.
The Commission also alleged that the social media giant failed to remove scam advertisements on its social media platform, Facebook.
Meta has yet to address these allegations, per the BBC.
Australia Sues Meta
The ACCC said in its announcement that the advertisements were likely made to mislead Facebook users into believing that the schemes were associated with the prominent public figures featured in the adverts. The schemes advertised were a new cryptocurrency or a money-making one.
These prominent public figures include former New South Wales Premier Mike Baird, TV host David Koch, and millionaire entrepreneur Dick Smith.
The advertisements are also said to contain links that took Facebook users to a fake media article. These articles included quotes attributed to the public figure featured in the ad endorsing a cryptocurrency or money-making scheme that scammers invite users to join.
Users who completed the signup process are then contacted by scammers who use high-pressure tactics like repeated phone calls to force them into depositing funds into the fake schemes.
The ACCC said that Meta is allegedly aware that the celebrity endorsement cryptocurrency scam ads were being displayed on Facebook but did not take sufficient steps to address the issue. The Commission also alleged that the company has aided and assisted or "knowingly concerned" in false or misleading conduct and representation by the advertisers.
ACCC Chair Rod Sims said that Meta's inaction to the issue was due to the "substantial revenue" the ads generate for the company. He also mentioned that Meta's technology allegedly enables the ads to target users most likely to engage with them and that the company failed to prevent the publication of similar scam advertisements on its pages or warn users about them. This inaction is in contrast to the company's promise to detect and prevent the publication of these advertisements on Facebook.
"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," Sims said.
Sims also added that the scam advertisements will not only result in untold losses to consumers, but it will also damage the reputation of the public figures it features, who have already reported the issue to Meta.
"Facebook failed to prevent the publication of fake ads even after the celebrities reported similar false, misleading, or deceptive ads to Meta," Sims said.
A Brief Summary Why the ACCC Sued Meta
The ACCC report said that the alleged scams began in 2019, when Fortescue Metals Group's former CEO, Andrew Forrest, sent an open letter to Meta's Mark Zuckerberg criticizing Facebook for allowing cryptocurrency scam ads that use his identity onto Facebook's platform.
Forrest then filed a separate lawsuit against Meta in February 2022.
Other individuals that were targeted by the ads suffered "untold losses," with one person losing $477,000 to the fake schemes, per the Financial Times.
