Judge allows deep fake crypto scam ads case against Meta

A court in the United States has rejected a request to dismiss a lawsuit filed by Australian businessman Andrew Forrest, who claimed that he used deep fake photos to promote fake cryptocurrency scam ads on Facebook. On June 17, California District Judge Casey Pitts ruled that Forrest could reopen his lawsuit and try to prove Meta was negligent in stopping the fraudulent ads. Forrest believes the company breached its obligation to act in a “commercially reasonable manner.”

Meta faces legal challenge over liability for fraudulent ads

Meta argued that Article 230 of the Contact Regulation Act relieved them of liability as distributors of external materials. This argument, as YouTube has previously used to avoid liability for crypto scam ads, is based on the law stating that a provider of an “interactive computer service” “shall not be deemed to be a provider of any information.” But Judge Pitts noted that Meta failed to prove “unequivocally” that Count 230 provides a “complete affirmative defense” to all of Forrest’s arguments.

Forrest told The Australian. “This is the first time in a U.S. civil court that a social media company has failed to attempt to use Section 230 immunity as a defense against civil liability for the conduct of its advertising business.”said.

“The ruling allows us to prove in court that Facebook can and should block fraudulent ads.”

Under Judge Pitts’ ruling, Forrest’s revised lawsuit may seek to show that Meta stole his name and image alongside scammers running bogus advertisements. Forrest argues that this abuse works to Meta’s advantage because it benefits more from ads featuring his image. Judge Pitts stated that Forrest “made a reasonable argument that Meta was actively involved in producing the advertisements in question.”

According to Forrest’s theses, Meta ( META ) used his advertising skills to “actively participate” in how the ads looked and who appeared. Judge Pitts:

“These arguments present a factual dispute as to whether Meta’s ad systems are neutral tools that anyone can use (or misuse) or whether the tools themselves contribute to the content of the ads.”

Due to insufficient evidence, Australian authorities decided in April to suspend investigating Forrest’s accusations against Meta about bogus crypto scam ads.

According to Forbes, the net worth of the 62-year-old iron ore miner Fortescue Metals Group is $16.6 billion. As Forrest’s lawsuit against Meta progresses, it could set a valuable precedent for social media companies’ obligations to stop and address invalid ads.

This news was first published on the Coin Engineer website.