Australia Sues Facebook Over Misleading Crypto Advertising With Celebrities

18/03/2022 – 08:45 Updated: 03/18/2022 – 08:49

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Cryptocurrencies have become a headache for regulators due to the proliferation of advertisements that do not warn, in most cases, of the risks of investment. Without going any further, in Spain the National Securities Market Commission (CNMV) has set itself the priority objective of controlling massive advertising campaigns (targeting more than 100,000 people), which will require prior notification to the supervisor and which may impose serious sanctions with up to 300,000 euros fine. However, Australia has gone a step further and has sued Meta, owner of Facebook, for spreading “misleading” or “false” advertising campaigns that use the image of “public figures” to promote investments in cryptocurrencies.

The Australian Competition and Consumer Commission (ACCC, acronym in English) alleges in the lawsuit filed in the Federal Court of the oceanic country that Meta Platforms and Meta Platforms Ireland were “accomplices or participated (in the dissemination of the campaigns) knowing that it was false or misleading conduct and representations of the advertisers“, according to his statement.

The ACCC also considers that Meta violates consumer and investment laws by spreading these campaigns to promote investments in cryptocurrencies, which include links to articles with false quotes from Australian public figures that they never authorized the use of their image or support this type of fraud. As part of this scam, the perpetrators contact Facebook users and use tactics to pressure them into depositing funds into their fraudulent investment schemes.

The ACCC noted that Meta allows advertisers to use Facebook’s algorithms to target users who are most likely to follow the link and visit the landing page. “Those landing page visits from ads generate significant revenue for Facebook”ACCC President Rod Sims said in the statement, noting that Meta had to take all measures to “detect and remove false or misleading advertising” from its social network.

Meta Platforms, which generates most of its income from the sale of advertising broadcast on its Facebook and Instagram platforms, had global revenues of 85,000 million dollars (76,500 million euros) in 2021, according to the ACCC. The regulatory body also considered that these actions not only have they caused thousands of dollars in losses to Facebook users but also damage to the image of public figures that they exploited without consent.

Figures from Scamwatch – an ACCC portal that allows Australian consumers to report scams – show that by 2021, consumers reported losses of AU$99 million ($73 million or €67 million) from cryptocurrency investment scams. The accusation of the ACCC is released after the Australian mining tycoon Andrew Forrest announced in early February a criminal lawsuit against Facebook for, according to a complaint, allowing the use of his image on this platform to comment on scams

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