Wednesday, July 24, 2024

Australian competition regulator takes Meta to court over fake crypto ads

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Australian competition regulator takes Meta to court over fake crypto ads

The Australian Competition and Consumer Commission (ACCC) is taking Meta Platforms, Inc. (formerly Facebook) to the Federal Court, alleging that the firm and its Irish branch engaged in “false, misleading or deceptive conduct” by publishing scam celebrity crypto ads.

Some users have lost hundreds of thousands of dollars to the sophisticated and long running scams tied to the ad.

The spotlight on Meta has heated up in Australia since the start of February, with Cointelegraph previously reporting that the ACCC was investigating the firm over allegedly fraudulent crypto ads. Aussie mining billionaire Andrew Forrest also took legal action against the company for hosting ads that allegedly used his name to defraud victims.

In an announcement posted earlier today, the ACCC asserted that Meta “aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.”

The ACCC highlighted unapproved or endorsed “scam” ads featuring prominent Australian figures such as entrepreneur Dick Smith, TV host David Koch and former NSW premier Mike Baird.

The regulator stated that the ads contained dubious links which directed users off Facebook to a fake media article that featured quotes attributed to the public figure supposedly endorsing a “cryptocurrency or money-making scheme.”

“Users were then invited to sign up and were subsequently contacted by scammers who used high-pressure tactics, such as repeated phone calls, to convince users to deposit funds into the fake schemes,” the announcement read.

ACCC Chair Rod Sims didn’t mince his words as he asserted that, “Meta is responsible for these ads that it publishes on its platform” and that company the stood to gain financially by failing to remove them:

“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.”

“In one shocking instance, we are aware of a consumer who lost more than $650,000 due to one of these scams being falsely advertised as an investment opportunity on Facebook. This is disgraceful,” he added.

Related: Instagram is adding NFTs soon, says Mark Zuckerberg

The ACCC is arguing that the firm’s conduct has breached the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act), and is seeking “declarations, injunctions, penalties, costs and other orders.”