False ads posted by third-parties on Instagram and Facebook fall under Meta’s responsibility, the court determined.
Meta is liable for fake ads posted by third-parties on Instagram and Facebook, a German court has ruled.
The lawsuit was brought against the tech giant by a German financial portal, Finanzfluss. The company and its founder’s images and registered logo were included in a series of fake ads without their consent. The ads recommended investments, which allegedly had fraudulent intent.
Finanzfluss reported 260 violations to Meta in August of 2024, with some of the posts staying online for as long as 62 days, the court said.
From 16 September, Meta must also disclose the specifics of the fake ads, as well as the revenue they generated, the ruling determined.
The Mark Zuckerberg-owned company must also remove content and pay compensation to the complainant, the court ordered.
The repercussions from this ruling could be monumental. Leaked internal documents showed Meta nets billions of dollars from scam ads, generating roughly 10% of its 2024 revenue from fraudulent product, illegal gambling, or scam ads.
This illustrates the scale of third-party scam ads on the Meta platforms. If the tech giant is held responsible for each one which has been reported, this could quickly prove overwhelming.
Meta, like other online platforms, has historically relied on the safe harbour provisions of the Digital Services Act (DSA), which determined that intermediaries and hosting platforms cannot be held legally liable for illegal content or ads posted on their sites by third-parties.
However, this is only applicable if they had no knowledge of the illegality. In this case, the court ruled Meta exercises control over content through its use of an algorithm and ad practices, and therefore cannot rely on the DSA for protection.
A Meta spokesperson said in a statement: “We respectfully disagree with this decision and are considering next steps. The company has already taken significant measures, including introducing mechanisms to proactively detect and remove content that has been reported.”
The court ruling is not final and the decision may be challenged by Meta.
