Consumer watchdog ACCC sues Meta over scammy crypto ads featuring prominent Australians
Aussie consumer watchdog the ACCC is taking Mark Zuckerberg’s Facebook-owned Meta to the Federal Court over what it alleges are crypto-advertisement scams.
The Australian Competition and Consumer Commission is alleging that Meta Platforms, Inc (formerly Facebook) has engaged in “false, misleading or deceptive conduct” by publishing scam celebrity crypto ads.
The ads in question have featured, among others, the images of well-known businessman Dick Smith, TV presenters David Koch and Waleed Aly, and former NSW Premier Mike Baird.
The “article” below has appeared on Facebook & vial email. It's false. It is a scam. Dick Smith does not endorse or promote Bitcoin schemes and has not provided media interviews saying that he invests in Bitcoin. Police, Facebook, ACCC & various news outlets have been notified. pic.twitter.com/2RJ7Rq6aqr
— Dick Smith (@DickSmithFairGo) March 10, 2020
In an announcement posted earlier on Friday, the ACCC alleges that Meta’s conduct was in breach of the Australian Consumer Law, or the Australian Securities and Investments Commission (ASIC) Act.
The watchdog claims the ads promoted investment in “crypto or money-making schemes”, and were likely to mislead Facebook users into believing the ads were associated with well-known Aussies, adding:
“The schemes were in fact scams, and the people featured in the ads had never approved or endorsed them.”
"One consumer lost more than $650,000 due to one of these scams being falsely advertised as an investment opportunity on Facebook."https://t.co/8ZH5hNfAWK
— Business Review (@aus_business) March 18, 2022
The ads apparently contained links that took Facebook users to a fake media article, which included quotes attributed to the prominent, unwitting identities. The ACCC says that users were invited to sign up and were then contacted by scammers who used badgering tactics, such as repeated phone calls, in order to get funds deposited into the fake schemes.
“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” ACCC Chair Rod Sims said, adding:
“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 November 2019, Australian mining magnate Andrew Forrest published an open letter to Mark Zuckerberg criticising Facebook for allowing crypto scam ads on the platform using his identity. He then began criminal proceedings against Meta Platforms in February 2022.
The ACCC noted that while Forrest’s “proceedings concern similar advertisements to those in the ACCC’s case”, the watchdog’s case is separate and is tackling slightly different legal aspects.
Forrest’s case will be heard in the Magistrates Court of Western Australia from March 28. If it’s successful, Facebook could face hefty fines or, better yet, be forced to change its advertising.
Forrest also has a similarly themed but separate case against Meta pending in the Superior Court of California, which he launched last September.
According to an ABC report, a Meta representative made the following statement in response to the latest Forrest-led litigation:
“We take a multifaceted approach to stop these ads, we work not just to detect and reject the ads themselves but also block advertisers from our services and, in some cases, take court action to enforce our policies. We’re committed to keeping these people off our platform.”