A U.S. judge has rejected Meta Platforms’ bid to dismiss a lawsuit filed by Australian mining tycoon Andrew Forrest. The lawsuit accuses Meta of negligence for allowing deceptive Facebook ads that used Forrest’s likeness to promote fraudulent crypto schemes.
U.S. District Judge Casey Pitts ruled that Forrest has the right to pursue legal action against Meta. Forrest claims that over 1,000 fraudulent ads were disseminated on Facebook in Australia between April and November 2023, resulting in significant financial losses for those affected. These ads falsely depicted Forrest endorsing crypto pump-and-dump schemes and used advanced tactics, including deepfake videos and AI-generated content, to bypass Facebook’s ad review systems.
Judge Pitts stated that Forrest’s allegations are sufficient to argue that Meta profited from the ads featuring his likeness, which supports claims of misappropriation. “Dr. Forrest claims that Meta profited more from ads that included his likeness than it would have if the ads had not,” Pitts wrote. This ruling allows Forrest to attempt to prove that Meta’s negligence violated its duty to operate in a commercially reasonable manner.
Forrest’s lawsuit argues that Meta’s tools for creating and enhancing ads were misused to create the scam advertisements, and that Meta failed to adequately review these ads before they were paid for and posted. Despite Meta’s defense under Section 230 of the Communications Decency Act, which typically protects platforms from liability for third-party content, Judge Pitts found that Meta had not definitively proven this defense.
Forrest, Australia’s second-richest person, emphasized the significance of the ruling, stating it is the first time in U.S. civil court that a social media company has failed to use Section 230 immunity as a defense against civil liability related to its advertising practices.
This decision marks a pivotal moment for social media accountability, potentially allowing Forrest to hold Meta responsible for its role in facilitating and profiting from the fraudulent ads.
