In an unprecedented move, the Australian consumer watchdog has commenced legal action against Facebook for failing to protect consumers from online scams.
The Australian Competition and Consumer Commission (ACCC) is seeking penalties and injunctions against Facebook for misleading or deceptive representations and unconscionable conduct.
The ACCC in its statement said that the legal action aims to stop the spread of online scams that have targeted vulnerable consumers in Australia.
Background on consumer watchdog action against Facebook
The Australian Competition and Consumer Commission (ACCC) has commenced action in the Federal Court alleging that Facebook contravened the Australian Consumer Law by making false or misleading representations and engaging in misleading or deceptive conduct concerning online scams.
The ACCC is seeking penalties, declarations, injunctions, corrective notices and costs against Facebook Inc., Facebook Ireland Ltd., Facebook Payments Inc. and other related entities concerning their involvement with online scam advertisements on the platform between July 2016 and December 2018.
The ACCC alleges that when consumers clicked on certain fraudulent advertisement links placed on the platform, they were directed to websites which tempted consumers into personal investment scams through promises of large returns for an initial outlay of a few hundred dollars. In some cases, consumer losses reached up to $50,000 each due to representations made by scammers on Facebook pages which used legitimate images of celebrities including Kate Winslet and Brad Pitt and fake reviews from people claiming success with these investments.
The consumer watchdog also alleges that when certain deceptive advertising were reported to Facebook moderators, they were not deleted promptly or at all by the tech giant’s moderation tool used by the entity’s moderators in Australia. This enabled such scam advertisements to remain unpublished or visible longer than they should have been – contributing to further losses suffered by consumers exposed to those advertisements.
Consumer watchdog commences misleading or deceptive action against Facebook over online scams
Australia’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), has commenced legal action against Facebook. It alleges that Facebook has misled or deceived Australian consumers by not taking sufficient steps to prevent online scams on its platform.
The ACCC is seeking penalties and injunctions to compel Facebook to take action against the scams.
This article explores the legal action brought against Facebook, its potential impact, and what steps Facebook can take to protect consumers from these scams.
Facebook’s alleged failure to take sufficient steps to prevent online scams
The consumer watchdog is seeking civil penalties, declarations and injunctions against Facebook after alleging the social media platform breached the Australian Consumer Law (ACL) by failing to take sufficient steps to prevent consumers from being ripped off online scams on their platform.
The Australian Competition and Consumer Commission (ACCC) has accused Facebook of failing to respond quickly or adequately to reports of online scams on social media.
In particular, it alleges that in 2018 thousands of Australians were scammed through fake accounts offering false advertising for products including diet pills and face mask dispensers. The ACCC also alleges Facebook took little or no effective action to prevent or reduce occurrences of online scams running an unauthorised business using its platforms.
It goes on to allege that even when consumer reports about these scams had been received, Facebook was slow in taking down offending posts related to them and in many cases did not take them down at all. As a result, the ACCC asserts that consumer detriment continued for extended periods while Facebook failed to take effective action against conduct it knew or should have known was occurring on its platform.
Potential damages suffered by consumers
The consumer watchdog has commenced legal action against Facebook in the federal court to curb online scams and protect vulnerable consumers. The action seeks penalties, injunctions, declarations and compliance orders against the social media platform.
The action is based on allegations that Facebook has made false or misleading representations about how third party websites use Facebook services to scam consumers and take their money. Specifically, it is alleged that Facebook had made false or misleading representations about consumer’s ability to control how their data was used and/or to stop unsolicited communications from scammers masquerading as legitimate websites.
If proven, these practices could have potential implications for consumers who have suffered losses from being deceived into providing personal information that third parties misused. It could also mean that those affected would have legal rights to pursue compensation from Facebook if they sustain financial losses due to deceptive or misleading conduct by the company. Consumers may also receive additional relief if a court order or injunction is obtained requiring that Facebook cease making such representations concerning its services.
Penalties and Injunctions
The Australian Consumer and Competition Commission (ACCC) is commencing legal action against Facebook for alleged misleading or deceptive conduct about its ability to protect users from online scams. The watchdog is looking for penalties and injunctions.
This case is highly significant, as it could set a precedent for online platform accountability in the future. First, let’s look at the details of this action and why it is so noteworthy.
Penalties sought by the consumer watchdog
The Australian Competition and Consumer Commission (ACCC) is taking Facebook to court in the Federal Court of Australia concerning false, misleading or deceptive conduct related to advertisements displayed on its site. According to the ACCC’s statement of claim, Facebook had effective systems to protect users from online scams but did not have such protection measures.
The ACCC seeks various penalties and injunctive relief against Facebook for misleading or deceptive conduct. This includes orders for injunctions requiring Facebook not only to comply with the Australian Consumer Law, but also with its policies. It may also seek an order that Facebook publish corrections and undertake consumer education activities so that consumers are aware of their rights and obligations under the law—and are more vigilant when dealing with online platforms.
In addition, the watchdog has requested that Facebook pay penalties for any breaches declared by the court as a consequence of its conduct and compliance costs associated with any injunction granted by the court. The ACCC also requests a monetary penalty (a sum of money paid as compensation or punishment), appropriate redress and possibly further orders due to harm suffered by consumers who have fallen victim to ‘online promotions’ through engaging with activity on Facebook’s platform. Redress could include compensation paid directly to affected consumers, refunding money paid to scammers or payment of monies spent by conned victims attempting to recover lost funds even when such attempts are unsuccessful.
Injunctions sought by the consumer watchdog
The Australian Competition and Consumer Commission (ACCC) has commenced proceedings in the Federal Court, seeking penalties and injunctions against Facebook for alleged breaches of the Australian Consumer Law. The action by the ACCC alleges that Facebook failed to make reasonable efforts to ensure that misleading or deceptive content regarding online scams, was removed or disabled promptly.
Injunctions are court orders that limit a person’s or companies activities, which seek to prevent further misconduct by an individual or corporation. Injunctions can be sought as part of an order made by the Court after a trial has occurred, or before trial on an interim basis. In this case, the ACCC is seeking unspecified injunctions against Facebook.
The ACCC has sought declarations of contravention and compensation orders for consumers impacted by online scams stemming from content shared on Facebook. The ACCC is also asking the Court to declare that all fees paid by consumers associated with such scams are repayable by Facebook. The size of any penalty imposed on Facebook and any final injunctions granted will be determined at trial later.
Conclusion
In conclusion, the consumer watchdog commencing a misleading or deceptive action against Facebook over online scams is an important step to protect consumers and hold companies like Facebook accountable for their actions.
This case will set a precedent for other companies and organizations that may violate consumer law, hopefully deter them from engaging in similar activities.
Summary of the consumer watchdog’s action against Facebook
The Australian Competition and Consumer Commission (ACCC) has initiated proceedings in the Federal Court of Australia against Facebook. The action is based on alleged breaches of the Australian Consumer Law due to Facebook allowing the posting and display of misleading or deceptive content by third parties. Specifically, the ACCC has alleged that Facebook allowed thousands of scam advertisements or posts on its platform, indicating that consumers could receive free or discounted items, prizes and free flights; instead, consumers were misled into signing up for expensive subscription traps which they found impossible to cancel.
Facebook denies these allegations and states it takes very seriously its responsibility to protect people’s safety. It also claims to have implemented various measures to help reduce online scams, such as a dedicated account enforcement team and algorithms that detect potential violations. Nevertheless, this action brings into sharp focus again Facebook’s ability for effective self-regulation.
The ACCC is seeking penalties, injunctions, declarations and orders for compensation or refunds concerning consumer costs due to interacting with deceptive or misleading ads on Facebook’s platform. The specific costs sought are likely to become public when proceedings are finalized however some indications have been given at this time they will be substantial. It remains to be seen whether this action will have any material impact on how online scams proliferate across social media platforms in Australia going forward.