Australia’s Watchdog Hauls Meta to Court Over Alleged Scam Crypto Ads

Australia’s competition watchdog is taking Facebook parent Meta Platforms Inc. and Meta Platforms Ireland Ltd. to federal court over allegations of publishing scam advertisements for cryptocurrencies featuring Australian public figures.

The Australian Competition and Consumer Commission (ACCC) alleged that Meta is in violation of the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act), according to a statement published on Friday (March 18).

The regulator also alleged that Meta “aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.”

The ads featured prominent Australians including businessman Dick Smith, TV presenter David Koch and former NSW Premier Mike Baird, and reportedly promoted crypto investments or money-making pursuits. The people featured never approved the advertisements nor endorsed the investment schemes, according to the statement.

Links in the ads brought Facebook users to a fake news article with quotes attributed to the public figure. Users were then given an invitation to sign up, followed by high-pressure sales tactics to buy into the scheme.

Read more: Coinbase, eToro Crypto Ads Banned for Misleading Consumers, Said UK Advertising Regulator

“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. Those visits to landing pages from ads generate substantial revenue for Facebook,” Sims said.

The ACCC alleged that Meta knew that Facebook was using the cryptocurrency scam advertisements but didn’t do anything to stop it, even after public figures complained that similar ads were being used worldwide without their consent.

“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.”

Related: Celebrities, Influencers Push Crypto Ads On Social Media