German Court Rules Meta Liable for Fake Facebook, Instagram Ads
The Frankfurt Regional Court said Thursday that Meta must halt the publication and distribution of fake ads that unlawfully exploited the logo of a financial information portal along with the name and likeness of its well-known founder.
The lawsuit was filed by a company that runs an online portal offering comparison calculators, product reviews and consumer guidance on financial products, together with its founder and managing director. The portal boasts more than 600,000 Instagram followers and roughly 29,000 on Facebook.
According to the court, unidentified users hijacked the company's registered logo and images of its founder to promote purported financial investments, funneling users toward external links in what appeared to be fraudulent schemes. Several affected users subsequently reached out to the plaintiffs directly.
The company reported nearly 260 violations to Meta in August 2024 alone, yet identical or substantially similar advertisements kept resurfacing. In some cases, Meta took as long as 62 days to remove the offending content.
The court concluded that the advertisements seriously violated the company's corporate personality rights as well as the founder's personal rights.
Meta Exercises Control Through Algorithms
The court dismissed Meta's argument that it could sidestep liability under the EU's Digital Services Act on the grounds that it had no prior knowledge of the fraudulent content.
Citing a recent ruling by the Court of Justice of the European Union, the judges said liability protections do not apply in the same way once a service provider exercises control over the content it displays.
Meta determines the ranking and timing of advertisements through an automated auction process and governs the distribution of content in users' feeds via algorithms, the court found. Unlike platforms that rely on purely chronological feeds, it added, Meta therefore exercises meaningful control over the advertising content shown to its users.
The court ordered Meta to compensate the plaintiffs for future damages stemming from the distribution of identical or similar fraudulent advertisements. The company must also disclose information about the ads and reveal the revenue it generated from them.
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