Meta Found Liable for Fraudulent Ads on Facebook, Instagram by German Court

A German court has ruled that Meta Platforms Inc. is liable for fraudulent advertisements posted by third parties on its Facebook and Instagram services. The court ordered the U.S. technology giant to pay damages, remove the infringing content, and disclose details about the ads and the revenue they generated.

Details of the Ruling

The lawsuit was initiated by the operator of a German financial portal and its founder after their trademarked logo and personal images were used without consent in deceptive investment advertisements. The court's decision, dated September 16, highlighted significant delays in Meta's response to complaints.

According to the court, the plaintiff reported nearly 260 violations to Meta in August 2024 alone. However, the company took as long as 62 days to remove some of the fraudulent posts. The ruling, which is not yet final and can be appealed, mandates that Meta must also provide information on the scope of the fake ads and the income earned from them.

Legal Implications and Context

The court rejected Meta's argument that it was protected by the European Union's Digital Services Act (DSA), which can shield platforms from liability if they lack knowledge of illegal content. The ruling stated that Meta exercises significant control over content through its algorithms and advertising systems, unlike a purely chronological feed, thereby negating the lack-of-knowledge defense.

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This decision references a precedent from a June ruling by the European Court of Justice, signaling a potentially stricter interpretation of platform liability in the EU. The outcome could expose Meta and other social media companies to increased legal and financial risks related to fraudulent content hosted on their platforms.

Meta's Response

A spokesperson for Meta stated that the company disagrees with the court's decision and is evaluating its next steps. "We respectfully disagree with this decision and are considering next steps," the spokesperson said in a statement reported by Reuters.

The company added that it has already taken significant action to combat such content, including using proactive detection measures and removing material that is reported. The ruling places further scrutiny on the effectiveness of these measures.