German Court Holds Meta Accountable for Fraudulent Ads
A German court has determined that Meta Platforms is accountable for fraudulent advertisements placed by external parties on its Instagram and Facebook platforms. The ruling compels the US Big Tech organisation to remove such content and to provide compensation. This judicial decision marks a notable development regarding platform liability for user generated advertising.
The legal action was initiated by a German financial portal operator and its founder, individuals whose established professional identities were reportedly compromised. Their proprietary logo and personal image were reportedly utilised without explicit permission in various online postings. These posts allegedly promoted investment opportunities with fraudulent intent, designed to mislead users into believing the schemes were legitimate due to the unauthorised association with the reputable financial entity. The complaint therefore centred on the deceptive use of trademarked brand elements and personal likenesses to lend false credibility to suspect financial schemes, aiming to exploit user trust for illicit gain.
And the portal operator had previously informed Meta of nearly 260 distinct infractions during an earlier August period. Despite these extensive reports, Meta reportedly took up to 62 days to address and remove some of the contested material. This delay in content moderation formed a significant component of the court's deliberation regarding Meta's overall responsibility. The slow response time potentially allowed the fraudulent advertisements to remain visible to a substantial user base for an extended duration.
The court stated that Meta could not invoke the lack of knowledge defence, which is typically available under the Digital Services Act. This particular defence is inapplicable here because, unlike platforms featuring purely chronological feeds that simply present content as it is posted, Meta actively maintains control over content. This control is exercised through its sophisticated algorithms and comprehensive advertising practices. These mechanisms systematically influence which advertisements users observe on their feeds and how they are displayed, indicating a deliberate editorial role. The court's assessment thus established a distinction between passive content hosting and active content curation, which carries increased responsibility for the material presented.
But the judicial body referred to an earlier decision by the European Court of Justice, setting a clear precedent for its current ruling. This earlier judgment provided a framework for assessing platform responsibility, especially when content is disseminated through algorithmic means rather than simple chronological presentation. The reliance on such a precedent indicates a consistent legal interpretation across European jurisdictions regarding tech company obligations.
A Meta spokesperson communicated disagreement with the court's decision. The company is currently evaluating its options for subsequent legal action, according to the statement. The spokesperson affirmed that Meta has undertaken substantial measures to combat fraudulent content, including employing proactive detection systems and promptly removing reported material. These efforts include automated screening tools and internal review teams dedicated to identifying and eliminating illicit postings.
So, this specific ruling mandates that Meta must also reveal comprehensive details regarding the fraudulent advertisements. This includes information about the specific content and any associated revenue generated from their display on the platforms. Such disclosure aims to provide further clarity on the extent of the issue and potential financial benefits accrued from these illicit postings, allowing for a more thorough understanding of the scope of the problem.
According to Reuters, the court's decision is not yet definitive. It remains subject to potential challenge through an appeal process. This indicates the possibility of further legal proceedings before the judgment becomes legally binding and fully enforceable, suggesting the matter could progress to higher judicial instances.
A German court has ruled Meta liable for fraudulent third party advertisements on Instagram and Facebook.
Meta must remove content, pay damages, and disclose details including revenue from these ads.
The court found Meta responsible due to its algorithmic control over content, invalidating a "lack of knowledge" defence.
Meta disagrees with the ruling and is considering an appeal.
Source: Reuters
