Describing the Federal Court action as “world-leading”,Australian Competition and Consumer Commission chairman Rod Sims said he expected the case,alleging Facebook had engaged in false,misleading or deceptive conduct by publishing scam advertisements,would be “hard fought” and cost the ACCC “north of $1 million”.
If the case is successful,Mr Sims said it would set a precedent proving Facebook is responsible for the ads it places on its platform. The ACCC will allege that Facebook’s algorithms and business model were designed to target people who were most likely to be taken in by the scam.
“If we are successful,it means that platforms,in this case Facebook,have to do a lot more to protect the users and put in much more active steps to do that. That will be a wonderful thing for Australians but hopefully have an effect worldwide,so people can use the internet,get all the massive benefits out of it,without the disadvantages that flow from activity like this,”Mr Sims said.
The ACCC alleges that ads that promoted investment in cryptocurrency or money-making schemes were likely to mislead Facebook users into believing the advertised schemes were associated with the people featured in the scam ads.
While he could not estimate the total amount lost through the scams because of the small number of people who complained,Mr Sims said he “could easily see $100 million”. The ACCC knows of one consumer who lost more than $650,000 on a fake investment opportunity that was advertised on Facebook.
“This is disgraceful,” he said.
The ads contained links that took Facebook users to a fake media article that included quotes attributed to the public figures claiming they endorsed a cryptocurrency or money-making scheme. Users were then invited to sign up and were contacted by scammers who pressured them through repeated phone calls to deposit funds into the fake schemes.