ACCC takes Meta to court over scam cryptocurrency advertising

ACCC and ASIC join forces to pursue the social media giant through the Federal Court over allegations of false, misleading or deceptive conduct

The Australian Competition and Consumer Commission (ACCC) is lining up alongside Twiggy Forrest and taking Facebook parent company, Meta, to court for publishing scam celebrity cryptocurrency advertising on its platform.

The regulatory watchdog last week confirmed it had instituted Federal Court proceedings against the two businesses making up Meta - Meta Platform and Meta Platforms Ireland – alleging the business engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring high-profile Australia business entrepreneurs and public figures.

The advertisements included familiar faces such as Dick Smith, David Koch and former NSW premier, Mike Baird and all promoted money making and cryptocurrency schemes. And all were scams, with none of the figures appearing approving or endorsing the advertisements. The ads linked through to fake sign-up pages where scammers used high-pressure tactics such as repeated calls to convince consumers to deposit funds into the fake schemes.

The ACCC is alleging Meta’s conduct is in breach of Australia’s Consumer Law or the Australian Securities and Investments Commission (ASIC) Act. It’s also alleging Meta aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.

ACCC chair, Rod Sims, said the case is oriented around the allegation that Meta is responsible for the advertisements published on its platform and knowing about them, did not take sufficient steps to address the issue.

“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,” Sims stated.

“The celebrity endorsement cryptocurrency scam ads were still being displayed on Facebook even after public figures around the world had complained that their names and images had been used in similar ads without their consent.”

One of these public figures, Twiggy Forrest, has now launched legal proceedings directly against Meta himself, alleging the social media giant committed criminal offences by allowing the cryptocurrency scams to be advertised on its platform. This followed on from Forrest’s original open letter to Meta chief, Mark Zuckerberg, in November 2019, criticising him and the business for allowing the ads to run and use his identity on the platform

The ACCC said while both proceedings concern similar advertisements, its case is separate to Forrest’s and pertains to different questions of law. Given that the allegations could well extend beyond its remit, the ASIC has also delegated certain powers and functions to the ACCC in order to commence and conduct the proceedings.

“We allege that the technology of Meta enabled these ads to be targeted to users most likely to engage with the ads, that Meta assured its users it would detect and prevent spam and promote safety on Facebook, but it failed to prevent the publication of other similar celebrity endorsement cryptocurrency scam ads on its pages or warn users,” Sims said. “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.”

In just one example, Sims said one individual lost more than $650,000 to one of the scams that appeared via advertising on Facebook.

“Apart from resulting in untold losses to consumers, these ads also damage the reputation of the public figures falsely associated with the ads,” Sims continued. “Meta failed to take sufficient steps to stop fake ads featuring public figures, even after those public figures reported to Meta that their name and image were being featured in celebrity endorsement cryptocurrency scam ads.”

The ACCC is seeking declarations, injunctions, penalties, costs and other orders.

The latest Federal Court proceedings are among a number the ACCC is pursuing against Facebook and Meta. Another, launched in December 2020, relates to Facebook allegedly misusing consumer data relating to a VPN app for marketing purposes.

Earlier in 2020, the watchdog also instigated proceeding pertaining to the Cambridge Analytica data breach scandal, which resulted in the private data of 300,000 Australian consumers being potentially disclosed for political profiling.

Don’t miss out on the wealth of insight and content provided by CMO A/NZ and sign up to our weekly CMO Digest newsletters and information services here.  

You can also follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page     

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments
cmo-xs-promo

Latest Videos

More Videos

Nice blog!Blog is really informative , valuable.keep updating us with such amazing blogs.influencer agency in Melbourne

Rajat Kumar

Why flipping Status Quo Bias is the key to B2B marketing success

Read more

good this information are very helpful for millions of peoples customer loyalty Consultant is an important part of every business.

Tom Devid

Report: 4 ways to generate customer loyalty

Read more

Great post, thanks for sharing such a informative content.

CodeWare Limited

APAC software company brings on first VP of growth

Read more

This article highlights Gartner’s latest digital experience platforms report and how they are influencing content operations ecosystems. ...

vikram Roy

Gartner 2022 Digital Experience Platforms reveals leading vendor players

Read more

What about this one FormDesigner.pro? I think it's a great platform providing a lot of options, you can collect different data and work w...

Salvador Lopez

Gartner highlights four content marketing platform players as leaders

Read more

Blog Posts

​Why we need to look at the whole brand puzzle, not just play with the pieces

Creating meaningful brands should be a holistic and considered process. However, all too frequently it’s one that is disparate and reactive, where one objective is prioritized at the expense of all others. So, what are the key pieces to the ‘good’ brand puzzle?

Marketing overseas? 4 ways to make your message stick

Companies encounter a variety of challenges when it comes to marketing overseas. Marketing departments often don’t know much about the business and cultural context of the international audiences they are trying to reach. Sometimes they are also unsure about what kind of marketing they should be doing.

Cynthia Dearin

Author, business strategist, advisor

From unconscious to reflective: What level of data user are you?

Using data is a hot topic right now. Leaders are realising data can no longer just be the responsibility of dedicated analysts or staff with ‘data’ in their title or role description.

Dr Selena Fisk

Data expert, author

Sign in