- ACCC has started proceedings against Facebook parent company Meta Platforms for allegedly engaging in misleading conduct to promote cryptocurrency investment.
- The consumer watchdog has alleged that Meta had engaged in deceptive conduct to target users by publishing scam Crypto advertisements featuring prominent figures.
- In the year 2021, Meta’s global advertising revenue was US$115 billion.
Social media giant Facebook is not new to controversies and is often surrounded by legalities. In the latest development, Facebook parent company Meta has gathered the ire of Australia's competition regulator Australian Competition and Consumer Commission (ACCC)
On Friday (18 March 2022), the ACCC filed a lawsuit against Meta for allegedly engaging in false, misleading and deceptive conduct to target users by publishing scam Crypto advertisements featuring prominent figures.
The ACCC has initiated Federal Court proceedings against Meta Platforms, Inc. and Meta Platforms Ireland Limited (together: Meta), claiming that their conduct violated the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act).
It is also alleged that Meta aided and abetted or was knowingly concerned about the advertisers' false or misleading conduct and representations.
The ACCC alleges that the ads, which encouraged investment in cryptocurrency or money-making schemes, were likely to mislead Facebook users to believe that the advertised schemes were associated with celebrities featuring in the ads. These celebrities included businessman Dick Smith, TV presenter David Koch and former NSW Premier Mike Baird. The consumer watchdog maintained that the schemes were "scams", and those appearing in the ads had never approved or endorsed them.
ACCC Sues Facebook-Owner Meta Over "False" Crypto Ads
Please Embed the Video:
Image Source: © Wavebreakmediamicro | Megapixl.com
The competition regulator has also said that the ads in question used Facebook's algorithms to enable advertisers to target users who are most likely to click on the link to visit the ad's landing page, thus generating substantial revenue for Facebook.
"... Meta ensured its users that it would catch and prevent spam; however, it failed to stop the publication of other similar celebrity endorsement cryptocurrency scam ads on its pages or alert its users," ACCC Chair Rod Sims said.
The ACCC observed that it seeks declarations, injunctions, penalties, costs and other orders.
Earlier, in November 2019, Australian businessman Andrew Forrest published an open letter to Facebook co-founder Mark Zuckerberg criticising Facebook for letting cryptocurrency scam ads using his identity onto the platform. He later commenced criminal proceedings against Meta Platforms in February 2022.
Meta Platforms generates most of its revenue from selling ads displayed to users on its Facebook and Instagram platforms. In the year 2021, Meta's global advertising revenue stood at US$115 billion.
Scamwatch figures suggest that in 2021, consumers reported losses amounting to $99 million to cryptocurrency investment scams.