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Australia says Facebook is a publisher and sues over posted frauds.

Editorial Staff

Australia's Consumer and Competition Commission has sued two companies within Meta, the parent group of Facebook, Instagram and WhatsApp over crypto-ads by celebrities. The companies are Meta Platforms, Inc. and Meta Platforms Ireland Limited

The action is intended to establish that social media and other platforms are responsible for what appears there, something that all social media - and even online versions of established media have long fought against.

ASIC alleges that Meta " engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures" in breach of the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act).

It is also alleged that Meta aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.

The ACCC alleges that the ads, which promoted investment in cryptocurrency or money-making schemes, were likely to mislead Facebook users into believing the advertised schemes were associated with well-known people featured in the ads, such as businessman Dick Smith, TV presenter David Koch and former NSW Premier Mike Baird. The schemes were in fact scams, and the people featured in the ads had never approved or endorsed them.

This is a long-standing problem : see this article from 2019 https://www.pleasebeinformed.c...

It remains to be seen if Microsoft, which owns LinkedIn will find itself subject to similar action.

The ads contained links which took Facebook users to a fake media article that included quotes attributed to the public figure featured in the ad endorsing a cryptocurrency or money-making scheme. Users were then invited to sign up and were subsequently 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 responsible for these ads that it publishes on its platform,” ACCC Chairman Rod Sims said.

Making platforms into "publishers" is one of the planks of "Cleaning up the 'net" a book written by Nigel Morris-Cotterill in 2015, forcefully putting a case he had argued since the late 1990s when fraud over the internet became an important subject and now an e-learning course (link below).

Sims goes to far, introducing complexity into an essentially simple claim. He says "“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.”

That's not the point. The point not algorithms nor revenue. The point is that the 'net is used for criminal purposes.

But there is a point that he doesn't make but Morris-Cotterill does: in sharing the profit from those adverts, Meta becomes a money launderer - as principal - always with the caveat that a company cannot form suspicion but its staff can; computers can't form suspicion but the staff who fail to produce or pay attention to exception reports can.

This is supported by the ACCC's allegation 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 celebrity endorsement cryptocurrency scam ads were still being displayed on Facebook even after public figures around the world had complained that their names and images had been used in similar ads 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,” Mr 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. Apart from resulting in untold losses to consumers, these ads also damage the reputation of the public figures falsely associated with the ads. Meta failed to take sufficient steps to stop fake ads featuring public figures, even after those public figures reported to Meta that their name and image were being featured in celebrity endorsement cryptocurrency scam ads,” Mr Sims said.

That makes two vital points: it's not only about crime, it's also about libel and Australia already has case law that allows claims of libel against online platforms which, it has been said, is one reason why Amazon created a .au website through an Australian shell company.

“In one shocking instance, we are aware of a consumer who lost more than AUD650,000 due to one of these scams being falsely advertised as an investment opportunity on Facebook. This is disgraceful,” Mr Sims said.

That's pleading consequences not fault and unless victims are able to join the action, they won't see any of the penalties that a Court may award.

The ACCC is seeking declarations, injunctions, penalties, costs and other orders.

The ramifications are immense for an industry that has taken laissez faire to mean a lack of responsibility. Everything from advertising to comments are in the firing line if the ACCC is successful.

Morris-Cotterill said "the first case of an internet company being held liable for the content on its platform was in the 1990s when CompuServe was found to have a responsibility similar to print media. While some countries are feeling their way with legislation, the global pattern is this: giant global enterprises abuse users on many levels and do little to police what users do unless they happen to upset a pet topic of the owners. Facebook is the worst at this with a range of topics that it defends while rejecting topics that disagree with it, even when properly reasoned. If it can police its perverted version of "hate speech," it can police fraud and libel. So can google, yahoo, twitter and LinkedIn. Newspapers vet correspondence in their print edition: there is no reason why they can be allowed to consider a "comments section" outside that boundary. Similarly "reviews" sites. It is publishing. "

Cleaning up the 'net - An Action Plan to combat the use and abuse of the internet for financial crime.
: https://learning.financialcrim...

Nigel Morris-Cotterill is associated with Vortex Centrum Limited, publisher of this newspaper.


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