Australian Regulator Sues Meta Over ‘Scam’ Crypto Ads

Australia’s top competition watchdog has begun legal proceedings against Facebook-parent Meta over allegations it engaged in “false, misleading or deceptive conduct” by publishing “scam” crypto ads on its platform.

The Australian Competition and Consumer Commission (ACCC) said Thursday Meta’s conduct, which saw it host false ads of “prominent Australian public figures” promoting crypto, was in breach of Australian Consumer Law.

“It is alleged that Meta was aware that the celebrity endorsement cryptocurrency scam ads were being displayed on Facebook but did not take sufficient steps to address the issue,” the regulator said.

Facebook’s history with ads related to crypto has been checkered beginning in 2018 when the platform banned the promotion of most material associated with crypto and blockchain businesses. The platform later reversed its decision to only include initial coin offerings.

Under the platform’s terms, written permission is required in order for companies to promote trading platforms, software and related services and products that enable monetization, reselling, swapping or staking of crypto.

In light of the ad limitations, the regulator alleges that Meta “aided and abetted” or was “knowingly concerned” in false or misleading conduct and representations by the advertisers.

The watchdog said the ads were like to “mislead” Facebook users into believing the schemes in the ads were connected with well-known individuals including businessman Dick Smith and TV presenter David Koch.

Advertisements on the platform contained links that forwarded users to false media articles which included quotes associated with well-known Australian public figures promoting certain crypto scams, the regulator said.

In February, Australian billionaire Andrew ‘Twiggy’ Forrest brought criminal proceedings against Meta’s platform alleging it failed to take preventative measures against false crypto ads that used his image to promote them.

The schemes were in fact scams and the well-known figures featured in the ads had actually never approved or endorsed them, the regulator said.

“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” ACCC Chair Rod Sims said.

“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.“

Sims added that those visits to landing pages from ads generated “substantial revenue” for Facebook.

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