TLDR
- Australia’s competition watchdog (ACCC) claims that 58% of crypto ads analyzed on Facebook either violate Meta’s policies or are potential scams.
- The ACCC is taking Meta to court over celebrity crypto scam ads, alleging the company aided misleading or deceptive conduct.
- The ads use images of high-profile Australians without authorization to promote crypto investment scams.
- Meta claims it takes action against fake accounts and scam ads, but the ACCC alleges the company continues to show and profit from similar ads.
- So far in 2024, Australians have reported over $78 million in losses from investment scams, with $13 million related to social media promotions.
Australia’s competition watchdog has raised alarm bells about cryptocurrency advertisements on Facebook, claiming that more than half of the ads reviewed either violate Meta’s policies or are potential scams.
This comes as part of an ongoing legal battle between the Australian Competition and Consumer Commission (ACCC) and Meta, Facebook’s parent company.
The ACCC took Meta to court in 2022, alleging that the tech giant had “aided and abetted” celebrity crypto scam ads on its platform. In a recent filing to the federal court, the regulator stated that its preliminary analysis found 58% of the crypto ads reviewed on Facebook were problematic.
These ads, which promote cryptocurrency investment scams, often use images of high-profile Australians without their authorization. The list of public figures whose likenesses have been misused includes entrepreneurs like Dick Smith and Andrew Forrest, actors such as Chris Hemsworth and Nicole Kidman, and even former politicians like Mike Baird.
The ACCC initially identified 600 ads as part of its claim but is now focusing on 234 specific instances. The regulator suggests that more examples may be uncovered during the case’s discovery process.
According to the ACCC, Meta has been aware since at least January 2018 that a significant proportion of cryptocurrency advertisements on Facebook use misleading or deceptive practices.
The regulator argues that while Meta does remove individual ads and sometimes bans associated accounts once complaints are received, the company continues to display and profit from similar ads featuring the same or other public figures.
The impact of these scams on Australian consumers is substantial. Data from the Australian government’s Scamwatch website shows that investment scams remain the most prominent way Australians are losing money to fraud. In 2024 alone, there have been 3,456 reports of investment scams, resulting in over $78 million in losses.
Of this total, more than $13 million in reported losses were linked to investment scams promoted on social media platforms.
Meta, for its part, maintains that it is actively combating scams on its platforms. A company spokesperson stated,
“Scammers use every platform available to them and constantly adapt to evade enforcement. Meta doesn’t want scams on its platforms and we will continue to work tirelessly to prevent them and protect our users.”
The tech giant claims to have taken action against hundreds of thousands of accounts targeting countries including Australia between January 2023 and January 2024. Meta also reports that all 433 cases related to 10,294 ads reported through the ACCC’s scam reporting channel between January 2023 and February 2024 were reviewed, found to be violating, and subsequently removed.
However, the ACCC alleges that Meta has failed to adopt reasonable safeguards to prevent or significantly reduce the prevalence of these ads.
The regulator claims that Meta has the technical ability to place warnings on advertisements, cautioning users about the potential for false endorsements, but has not implemented such measures.
A hearing date for the ACCC’s case against Meta has yet to be set. The outcome of this legal battle could have significant implications for how social media platforms handle cryptocurrency advertising and their broader responsibilities in preventing online scams.
