Facebook, now known as Meta (NASDAQ: META), received a US judge rejection over its attempt to dismiss a lawsuit filed by the Australian mining company. The lawsuit pushed by Andrew Forrest accuses Meta of negligence in allowing scam advertisements on Facebook. This includes falsely featuring Forrest promoting fake crypto and other fraudulent investments.
Meta can’t dodge this
According to reports, US District Judge Casey Pitts on Monday ruled that Forrest could proceed with his claims over Meta’s negligence in permitting the ads to breach its duty to operate in a commercially reasonable manner.
This suggests that Forrest can move ahead with claims that Meta misappropriated his name and likeness. This is not limited to just the fraudsters behind the bogus ads.
Pitts stated that “Dr. Forrest claims that Meta profited more from ads that included his likeness than it would have if the ads had not”. He added, “This is enough to adequately plead that the alleged misappropriation was to Meta’s advantage.”
Such kinds of frauds and scams have increased over time on the social media platform. These campaigns have resulted in billions of dollars of loot over the span of the last 5-10 years.
What’s the argument here?
In its defense, Meta had argued that Section 230 of the federal Communications Decency Act shielded it from liability as a publisher of third-party content. However, the Judge noted that Forrest’s claims raise factual dispute. It is regarding whether Meta’s ad systems were neutral tools or if the tools themselves contributed to the content of the fraudulent ads.
Forrest stated that over 1,000 scam ads appeared on Facebook in Australia between April and November 2023. This resulted in millions of dollars in losses for victims. Forbes magazine estimates Forrest’s net worth at USD 16.5 billion (AUD 24.8 billion).
In his statement, Forrest called the judge’s decision a “crucial strategic victory” in holding Facebook accountable for its advertising practices. Forrest is seeking both compensatory and punitive damages.
This case marks the first instance where a social media company was unable to invoke Section 230 immunity in a U.S. civil case related to its advertising business, according to Forrest. Previously, Australian prosecutors declined to pursue criminal charges that Forrest had brought against Meta in Australia over the scam crypto ads.
