Andrew Forrest, Australia’s second-richest person, says he tried for years to get Facebook to act as photos of him were plastered across false advertisements on the social media platform, swindling users intocryptocurrencies. Forrest says that he tried to get Facebook to remove the ads, but they didn’t, and that innocent Australians kept investing under his name.
Forrest filed a private prosecution against Meta under Australian law, which allows people to file criminal complaints against other people. Forrest alleges that the company’s actions ran afoul of Australian anti-money laundering laws because it didn’t take enough steps to stop criminals from using its platform to defraud Australian users with scam ads. The Australian Competition and Consumer Commission echoed his claims in a separate lawsuit, accusing the social media giant of engaging in false, misleading or deceptive conduct by publishing the fake ads.
They are not unique to Australia. As recently as February, scam ads on Facebook featured bogus cryptocurrencies and people like Warren Buffet. There were ads that had an image of Mark Zuckerberg, Meta’s CEO, to entice users to invest in a new token.
The claims made by Forrest and the Australian consumer protection agency mark the first time a jurisdiction has tried to hold Facebook accountable for the content on its site.
“Dissatisfaction with the social media platforms is mounting around the world,” says Paul Barrett, NYU Stern Center for Business and Human Rights, “and that the United States is well behind a number of other jurisdictions, Australia being one, the EU being a much larger and influential jurisdiction, that have been moving to greater regulation and oversight.”
A Facebook spokesman said in an email that the company has cooperated with the ACCC and will defend itself against the ongoing litigation.
“We don’t want ads seeking to scam people out of money or mislead people on Facebook – they violate our policies and are not good for our community,” the Facebook spokesperson. “We use technology to detect and block scam ads and work to get ahead of scammers’ attempts to evade our detection systems.”
On Monday local time, Facebook was scheduled to appear in an initial hearing for Forrest in a Perth court, but didn’t show up, prompting the court to enter a plea of not guilty on the company’s behalf Facebook wouldn’t appear because the court didn’t have jurisdiction, according to a member of Forrest’s legal team. The next hearing will be in June.
“Arguing that even though they make a fortune from Australian people they don’t have to defend themselves in West Australian court,” Forrest says, “that goes to the core of [Meta’s] attitude that our job is just to make money.”
In September, Forrest filed a civil complaint in the Superior Court of California, San Mateo County, accusing Facebook of aiding and abetting fraud and failing to warn users of scam ads. Section 230 of the federal Communications Decency Act, which exempts internet companies from liability for third-party content published on their platforms, is what the lawyers for Facebook argued.
“organizing, recommending, and amplifying third-party content is not the same as creating it, and challenging the targeting of content inherently treats a Defendant as a publisher or speaker.” An upcoming hearing is scheduled for April 22.
Forrest, who made his fortune in mining and is worth $19 billion according to a Forbes estimate, is among a group of Australian public figures and celebrities, including a former New South Wales premier. Forrest was made aware that his image was being used in a scam when Facebook users contacted him.
The ACCC says that the scam ads entice users to click through to a third-party website with a fake media article that would include false quotes and images of celebrities endorsing the advertised product. Users were contacted by people who told them to give them money.
Forrest wrote an open letter to Mark Zuckerberg, the CEO of Meta, who he had previously met through initiatives linked to the Giving Pledge, because he was unsuccessful in reaching the Australian executives of Facebook. Forrest says he was told by Facebook executives in Australia that the social networking site did not have the ability to identify scam artists.
A Facebook user lost $650,000 in a scam. The scam ads were not removed by Facebook after being notified by the celebrities. The agency claims that the technology of Meta enabled the ads to be targeted to users most likely to engage with the ads.
There are other legal headaches for Facebook in Australia. The company was sued in 2020 for collecting user data without permission. In February of 2021, Australia enacted a law that would force Facebook and Google to negotiate payments with publishers for news content. The move caused an uproar and prompted Facebook to shut off its news services to Australians.
Efforts in the U.S. have not been successful. To regulate technology firms, including calls to rewrite Section 230 of the federal Communications Decency Act, isn’t likely to prompt a “stampede” of litigation in the U.S. NYU’s Barrett says about the scam over the cryptocurrencies. The litigation Down Under likely won’t be an issue that Facebook can ignore, according to him.
Featured photo source unsplash.com
