Meta to face US lawsuit by Australian billionaire over scam crypto ads on Facebook

The following case is significant as it marks the first instance where a social media company could not use Section 230 immunity in a US civil case concerning its advertising business.
Meta's logo Electronics, Mobile Phone, Phone, Person, Face, Head

A US judge has denied Meta Platforms’ attempt to dismiss a lawsuit filed by Australian billionaire Andrew Forrest. The lawsuit accuses Meta of negligence for allowing scam advertisements featuring Forrest’s likeness, promoting fake cryptocurrency and fraudulent investments, to appear on Facebook. Judge Casey Pitts ruled that Forrest could proceed with claims that Meta’s actions breached its duty to operate responsibly and that Meta misappropriated Forrest’s name and likeness for profit.

Meta had argued that it was protected under Section 230 of the Communications Decency Act, which typically shields online platforms from liability for third-party content. However, the judge determined that Forrest’s allegations raised questions about whether Meta’s advertising tools actively contributed to the misleading content rather than simply hosting it neutrally.

Forrest alleges that over 1,000 fraudulent ads featuring him appeared on Facebook in Australia from April to November 2023, resulting in millions of dollars in losses for victims. The lawsuit marks a significant step, challenging the usual immunity social media companies claim under Section 230 for their advertising practices. Forrest is seeking compensatory and punitive damages from Meta.

The following decision follows Australian prosecutors’ refusal to pursue criminal charges against Meta over similar scam ads. Forrest, the executive chairman of Fortescue Metals Group, considers the judge’s ruling a strategic victory in holding social media companies accountable for fraudulent advertising.