By: Alexa Sullivan
Facebook, which has now adopted the name Meta, has been accused of breaching anti-money laundering laws by not taking sufficient steps to prevent false cryptocurrency advertisements used to scam innocent Australians. Australian billionaire Andrew Forrest has filed a lawsuit against the social media company for using his likeness and image to con users with deceptive promotional practices, specifically for allowing the circulation of fraudulent cryptocurrency ads using his image. Forest has stated that he is concerned about the citizens of Australia being swindled out of their hard-earned money via click-bait ads on social media, and claims that Meta’s culture failed to prevent its platform from being used systemically for criminal activity. In a statement to the press regarding the lawsuit, Mr. Forrest said, “This action is being taken on behalf of those everyday Australians – mums and dads, grans and grandads – who work all their lives to gather their savings and to ensure those savings aren’t swindled away by scammers. I’m acting here for Australians, but this is happening all over the world.”
Under Australian law, a private prosecution of a foreign corporation for alleged offenses under Part 10 of the Commonwealth Criminal Code requires the consent of the country’s attorney general. Criminal charges have been imposed using a rarely-deployed provision in federal law that permits a private citizen to bring criminal actions with the support of the Attorney-General of the country. If Meta is found to be liable for the alleged crimes it has been charged with, the company may face fines and be compelled to change its mechanism of third-party advertising in the country.
Meta has faced criticism in the past for the presence of crypto scams on the platform. While Bitcoin and similar cryptocurrency scams have been banned from the platform, this problem has proliferated in recent years. Most recently in 2019, Mr. Forrest publicly appealed to Meta’s CEO at the time, Mark Zuckerberg, asking him to stop the ads that promoted cryptocurrency investment schemes. This appeal did not attract much attention from the social media platform. It has been recognized that social media companies have a hard time filtering ads submitted to them because scammers use a technique called “cloaking” to expose different content to ad reviewers for the companies. This allows scammers to avoid regulatory checks set in place on the websites.
In response to these allegations, Meta is claiming that the company has always been very committed to keeping scammers and false advertisers off the platform. The social media giant says it has taken a “multifaceted approach” to prevent these type of ads from entering its platform by blocking these advertisers and rejecting the ads themselves. As a defense, Meta has also claimed to have safe harbor protections that shields it from liability for content posted by its users. In the United States, under Section 230 of the Communications Act, tech companies like Meta are protected from being held liable for the actions or content of their users. This law promotes online freedom of expression and the free flow of ideas via the internet. The legislature in Australia has recently been targeting such protections offered to social media companies under Australian law in an effort to make these platforms liable for defamatory content posted by users. The Australian Prime Minister Scott Morrison warned tech companies last year that he was prepared to make these social media platforms liable for defamatory content posted by its users.
This lawsuit comes as a tactic by Mr. Forrest to aid legislative efforts in Australia that are attempting to erode the protections afforded to social media companies. Mr. Forrest has claimed this may be the first time ever that Meta would face actual criminal charges. If the Australian legislature is amended, and criminal sanctions are imposed upon Meta for content posted by third party users, this will have strong implications on tech companies, user privacy, and regulatory measures moving forward. This attempt at moderating content by holding these companies to a higher standard also may stand to infringe upon the expression and the free flow of ideas of users. Additionally, social media platforms, like Meta, will have the daunting task of controlling the cryptocurrency sector in order to prevent further scamming. This is a difficult task for these companies because cryptocurrency scams are very difficult to regulate, as scammers frequently evade capture due to changes in ad text and the use of hundreds of different domain names. If the Australian legislature is amended to impose liability upon tech companies, it may open the flood gates for a multitude of lawsuits and may also infringe upon the free expression of users.
Student Bio: Alexa Sullivan is a second-year law student at Suffolk University Law School. She is a staffer on the Journal of High Technology Law. Alexa received a Bachelor of Science Degree in Biology and with a minor in Business from Loyola Maryland University.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
