Forrest fights Facebook over scam

Investors who have lost thousands of dollars after being trapped by social media advertisements claiming to tell the investment secrets of the rich and famous have every reason to be upset. Just as mining billionaire Andrew Forrest is entitled to feel angry, embarrassed and frustrated that his good reputation is being damaged in the name of profit for possibly criminal enterprise. Facebook, which carries the offending advertisements, including Mr Forrest’s image, should not get off scot-free. Mr Forrest is taking a big gamble to defend his honour and seek to protect innocent victims of online scams that entice vulnerable people into risky investments.

The advertisements have coincided with a boom in speculative investment in cryptocurrencies. Unfortunately for many unsophisticated investors, high prices for cryptocurrencies have come crashing back to earth in recent months as investment markets are repriced in anticipation of higher interest rates in the US.

Mr Forrest is one of the few individuals who can afford to use the courts to attempt to bring companies such as Facebook to account. But he is not the only famous person caught in the online get-rich-quick scam web of lies. Mr Forrest deserves respect for taking on the difficult task of bringing what he considers a criminal enterprise before the courts in Australia and California.

Facebook claims that, like Mr Forrest, it is opposed to the advertisements, does not endorse them and has tried to weed them out. It remains to be seen how the courts will deal with Mr Forrest’s complaint alleging the social media giant breached anti-money laundering laws with its algorithms funnelling unsuspecting victims to cryptocurrency scams.

Regardless of what the courts decide, the online trap is further evidence that Big Tech has been able to act in a way that is outside of the normal bounds of business. Traditional publishers quickly would be brought to account if they attempted to publish the sort of unregulated investment advice claiming fake celebrity endorsements as Facebook has done. It is further justification for online media giants to be treated as publishers, not carriers, with all the legal obligations that entails.