Facebook’s crypto practices worry a major regulator


Facebook finds itself again at the center of a controversy.

It’s as if the social media giant, which last October changed its name to Meta Platforms (Facebook) – Get the Class A report from Meta Platforms Inc.had trouble managing his practices.

The Australian Consumer Watchdog (ACCC) has decided to sue Meta over allegedly ‘aided and abetted’ celebrity scam ads on Facebook that cost some Australians hundreds of thousands of dollars.”

Meta “has engaged in false, misleading or misleading conduct by posting fraudulent advertisements featuring prominent Australian public figures,” the regulator argued in A press release.

The ACCC alleges that this conduct was in breach of the Australian Consumer Law (ACL) or the Australian Securities and Investments Act (ASIC Act).

Fake advertisements associated with celebrities

It is also alleged that Meta aided and abetted or was knowingly involved in the false or misleading conduct and misrepresentations of advertisers.

“The advertisements, which promoted cryptocurrency investment or money-making schemes, were likely to mislead Facebook users into believing that the advertised schemes were associated with well-known individuals featured in advertisements, such as businessman Dick Smith, TV presenter David Koch and former New South Wales Premier Mike Baird,” the ACCC said.

Added: “The schemes were actually scams, and the people featured in the ads had never endorsed or endorsed them >

According to the regulator, the ads contained links that directed Facebook users to a fake media article that included quotes attributed to the public figure featured in the ad endorsing a cryptocurrency or money-earning scheme.

“Users were then prompted to register and were then contacted by scammers who used high pressure tactics, such as repeated phone calls, to convince users to deposit funds into the fake schemes.”

“The essence of our case is that Meta is liable for these advertisements it posts on its platform,” ACCC Chairman Rod Sims said.

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“It’s a key part of Meta’s business to allow advertisers to target users most likely to click the link in an ad to visit the ad’s landing page, using Facebook’s algorithms. These visits to landing pages from ads generate substantial revenue for Facebook. »

“In one shocking case, we know of a consumer who lost over $650,000 due to one of these scams falsely advertised as an investment opportunity on Facebook. It’s shameful,” Mr Sims said.

It is alleged that Meta was aware of the celebrity endorsement cryptocurrency scam ads being displayed on Facebook, but failed to take sufficient action to address the issue. Cryptocurrency scam advertisements sponsoring celebrities were still displayed on Facebook even after public figures around the world complained that their names and images had been used in similar advertisements without their consent.

The regulator is asking for penalties, fees and other orders.

Contacted by TheStreet, Meta did not respond. But according to statements made to other news outlets, Meta said he would defend the proceedings.

Facebook accused of “malicious technique”

“We don’t want ads that seek to scam people for money or mislead them on Facebook – they violate our policies and aren’t good for our community. We use technology to detect and block fraudulent advertisements and strive to stay ahead of scammers’ attempts to evade our detection systems,” a spokesperson said. told the Guardian.

“We have cooperated with the ACCC’s investigation of this matter to date.”

Meta removed 1.7 billion fake accounts and 1.2 billion spam content between October and December last year – over 99.9% and 99.6% respectively of each were logged out before being reported.

Mark Zuckerberg’s company deposit a 2020 California lawsuit against Basant Gajjar.

“By using the name ‘LeadCloak’, Gajjar violated Facebook’s terms and policies by providing cloaking software and services designed to bypass automated ad review systems and ultimately serve misleading ads on Facebook and Instagram,” Facebook said in April 2020.

The company explained that cloaking is a malicious technique that tampers with ad review systems by disguising the nature of the website linked to an ad. When ads are hidden, a company’s ad review system may see a website featuring an innocuous product such as a sweater, but a user will see a different website promoting misleading products and services that , in many cases, are not allowed.

“In this case, Leadcloak’s software was used to conceal websites containing scams related to COVID-19, cryptocurrency, pharmaceuticals, diet pills, and fake news pages. Some of these Masked websites also included images of celebrities,” Jessica Romero said at the time. , director of platform enforcement and litigation at Facebook in a blog post.


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