Australia’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), is pursuing Meta, the parent company of Facebook, over its handling of cryptocurrency-related advertisements on the platform. The ACCC alleges that a significant portion of these ads are either scams or violate Meta’s advertising policies, raising critical questions about the role of social media platforms in safeguarding users from online fraud.
The ACCC’s Allegations
According to a ruling issued by the Federal Court earlier this month, the ACCC claims that more than half of the cryptocurrency ads analysed on Facebook were deceptive or violated the platform’s rules. According to the regulator, Meta has been aware of this issue since at least January 2018 but failed to take adequate measures to prevent the proliferation of these fraudulent ads.
The Federal Court heard that an initial analysis by the ACCC revealed that 58% of the crypto ads and related landing pages reviewed were either in violation of Meta’s policies or were potentially scams. These ads often featured prominent public figures, including celebrities and business leaders (such as Elon Musk), who were falsely portrayed as endorsing the scams. Other scammers have posed as “professors”, attempting to deceive people into depositing funds with promises of high returns.
The ACCC advances allegations of misleading and deceptive conduct and false or misleading representations against Meta under the Australian Consumer Law and the Australian Securities and Investments Commission Act 2001 (Cth).
Despite Meta’s actions to remove specific ads and ban accounts after receiving complaints, the ACCC alleges that the company has continued to allow similar ads to appear, earning revenue from these misleading promotions. The ACCC also claims that Meta could have developed technology to warn users about the risks of such ads but chose not to do so.
Meta’s Defence
Meta’s has noted the complexity of tackling online scams, as scammers continuously adapt their methods to avoid detection. According to The Guardian, a spokesperson for Meta stated that the company is committed to preventing scams on its platforms and protecting users, despite the challenges involved.
Despite methods implemented by Meta, including a new requirement for advertisers introduced in June of this year to verify a phone number associated with their account, the ACCC remains sceptical of Meta’s efforts. The regulator believes that while these actions address individual cases, they do not sufficiently tackle the broader issue of systemic fraud on the platform.
In the current Federal Court application, Meta sought to strike out certain parts of the ACCC’s pleaded case. On this occasion, it was successful in obtaining orders requiring the ACCC to replead parts of its case against the firm.
Implications for Social Media Regulation
The ACCC’s case against Meta has broader implications for the regulation of social media platforms. The ACCC’s actions reflect a growing expectation that companies like Meta must be more proactive in preventing the spread of fraudulent content.
The financial impact of these scams is considerable. According to Scamwatch, investment scams promoted on social media have led to over $13 million in reported losses in 2024 alone. This figure is part of a larger trend of rising scam-related losses, with $134 million reported across various channels during the same period.
As the legal proceedings continue, the outcome could set a precedent for how social media platforms are held accountable for the content they host, not just in Australia but globally.
A hearing date has yet to be set, but the stakes are high. For users, the case underscores the importance of being vigilant when encountering online investment opportunities, particularly those that seem too good to be true.
The case also highlights the need for a robust licensing framework for cryptocurrency businesses to help consumers differentiate between licensed and unscrupulous fraudsters who seek to exploit blockchain technologies and cryptocurrency to induce consumers to part with their hard earned funds.
