In a concerning revelation, Australia's competition watchdog, the Australian Competition and Consumer Commission (ACCC), has found that over 58% of cryptocurrency advertisements on Facebook either violate Meta’s policies or potentially promote scams. This finding emerges from the ACCC's preliminary analysis and underscores ongoing issues with misleading crypto advertisements on the platform.
ACCC's Allegations and Legal Actions
In 2022, the ACCC filed a lawsuit against Meta, Facebook's parent company, accusing it of "aiding and abetting" celebrity crypto scam ads. The case, which has yet to see a hearing date, alleges that Meta has not done enough to prevent fraudulent advertisements featuring high-profile Australians like Dick Smith, James Packer, and Chris Hemsworth.
The ACCC's latest court filing highlights that of the 600 crypto ads reviewed, 234 are currently under scrutiny for potentially involving scams or policy violations. These ads use images of celebrities without their consent to falsely promote cryptocurrency investments, leading to significant consumer harm.
Impact of Crypto Scams in Australia
Investment scams have become a major issue in Australia. According to Scamwatch, investment scams have caused over $78 million in losses so far in 2024, with 3,456 reports filed. The use of celebrity endorsements in these scams has exacerbated the problem, misleading consumers into investing in fraudulent schemes.
Meta’s Response and Ongoing Challenges
Meta has faced criticism for its handling of scam ads. The ACCC claims that Meta has been aware of deceptive crypto ads since at least January 2018 but has failed to effectively address the issue. While Meta does take down individual ads and ban accounts upon receiving complaints, it continues to earn revenue from similar fraudulent ads.
Meta asserts that it invests in technologies to combat scams and removes fake accounts. However, Statista data shows a decrease in the number of fake accounts removed in recent quarters, with Facebook addressing 691 million fake profiles in Q4 2023, down from previous highs.
Recent Developments and Legal Precedents
In a related case, Australian mining tycoon Andrew Forrest sued Meta for using deep fakes of his image in scam crypto ads. Although initially dismissed, a U.S. judge has allowed the case to proceed, reflecting the growing legal scrutiny on Meta’s handling of fraudulent content.
Conclusion
The ACCC's findings reveal significant issues with cryptocurrency advertisements on Facebook, highlighting the platform’s struggles with policy enforcement and scam prevention. As legal actions and investigations continue, there is growing pressure on Meta to enhance its efforts to protect users from fraudulent schemes and ensure stricter compliance with advertising policies.
As the regulatory landscape evolves, both Meta and the broader tech industry will need to address these challenges to prevent further consumer harm and maintain trust in digital advertising platforms.
August 2024, Cryptoniteuae