Meta loses bid to wriggle out of billionaire’s crypto scam ad lawsuit

The NFT Unicorn 2c2d47c6-9058-4afa-ad57-7ccf2701e19d Meta loses bid to wriggle out of billionaire’s crypto scam ad lawsuit Crypto News

A United States judge has rejected Meta Platform’s bid to toss a lawsuit from billionaire Australian mining tycoon Andrew Forrest over Facebook ads that used deep fakes in his image to promote scam crypto schemes.

California District Judge Casey Pitts said in a Monday, June 17 order that Forrest could re-file his suit and try to prove that Meta’s negligence in failing to stop the scam ads broke its duty to operate in a “commercially reasonable manner.”

Meta argued that Section 230 of the Communications Decency Act exempted it from responsibility as a publisher of third-party content — an argument YouTube had unsuccessfully used to try to avoid blame for crypto scam ads on its platform.

The nearly 30-year-old law states a provider of an “interactive computer service” won’t be treated “as the publisher […] of any information provided by another information content provider.”

But Judge Pitts found Meta hadn’t “established beyond dispute” that Section 230 gave it “an airtight affirmative defense” to all of Forrest’s allegations.

“It marks the first time in the U.S. civil court that a social media company has failed to succeed in using Section 230 immunity as a defense against civil liability for the conduct of its advertising business,” Forrest told The Australian.

“The decision means we can seek to prove in court that Facebook can and should prevent displaying fraudulent ads on its site while refusing to take any responsibility,” he added.

Forrest can try to pin Meta for ads

The order says Forrest’s amended lawsuit can try to prove that Meta misappropriated his name and likeness in addition to the scammers who made the faked ads.

“Forrest claims that Meta profited more from ads that included his likeness than it would have if the ads had not,” Judge Pitts wrote. “This is enough to adequately plead that the alleged misappropriation was to Meta’s advantage.”

Asc alleged deep fake video of Forrest promoting a scam crypto scheme on Facebook. Source: CourtListener

She also found Forrest “plausibly alleged that Meta played an active role in creating the ads at issue.”

Forrest alleged Meta had “active involvement” in how the ads appeared and who they were shown to through its advertiser tools.

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“These allegations present a factual dispute regarding whether Meta’s ad systems were neutral tools that anyone could use (or misuse) or whether the tools themselves contributed to the content of the ads,” Judge Pitts said.

In April, Australian prosecutors stopped pursuing Forrest’s criminal charges filed against Meta in the country over deep fake crypto scam ads, saying there wasn’t enough evidence.

Forbes pins the net worth of the 62-year-old founder of iron ore producer Fortescue Metals Group at $16.6 billion.

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