Australia has filed a lawsuit against Meta, the parent company of Facebook, alleging that it allowed fraudulent ads to target users with phony celebrity endorsements.
According to a regulator, the internet giant participated in “false, misleading, or deceptive conduct” by knowingly displaying adverts for fraudulent cryptocurrency.
Financial and other penalties could be imposed on the US corporation.
Meta has yet to respond but has previously stated that it is dedicated to preventing scammers from using its services.
The ads in question, according to the Australian Competition and Consumer Commission (ACCC), exploited Facebook’s algorithms to target vulnerable consumers and featured phony comments from Australian celebrities.
Former New South Wales Premier Mike Baird, popular TV broadcaster David Koch, and rich entrepreneur Dick Smith were among the names used without permission.
The ACCC chairman Rod Sims said in a statement on Friday that “the essence of our argument is that Meta is liable for these adverts that it posts on its platform.”
Meta allegedly did this intentionally and failed to prevent the scams despite celebrity concerns, according to the court action filed in Australia’s Federal Court.
“We know of one consumer who lost almost A$650,000 (£360,000; $480,000) as a result of one of these frauds being falsely presented as an investment opportunity on Facebook. This is a disgraceful situation “Mr. Sims explained.
Last month, Australian millionaire Andrew Forrest filed a criminal complaint against Meta for using his image in fraudulent adverts.
While Dr. Forrest accuses Google of violating anti-money laundering regulations, the ACCC’s complaint involves suspected violations of consumer law or another regulatory act.
In 2021, Meta, which also owns Instagram and Whatsapp, generated $115 billion in global advertising income.
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