Dutch Court Rules vs. Facebook in Suit Over Cryptocurrency Scam Ads

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Facebook’s oversight of cryptocurrency ads was not enough to satisfy a court in the Netherlands.

Dutch court Rechtbank Amsterdam issued a ruling this week saying that the social network can be required to use filter technologies to identify and take down ads linked to cryptocurrency scams, which featured the images of celebrities including media personality John de Mol, Natasha Lomas of TechCrunch reported.

de Mol filed a lawsuit against Facebook in April over the ads, according to Lomas.

A Facebook spokesperson told Lomas: “We just received the ruling and will now look at its implications. We will consider all legal actions, including appeal. Importantly, this ruling does not change our commitment to fighting these types of ads. We cannot stress enough that these types of ads have absolutely no place on Facebook, and we remove them when we find them. We take this very seriously and will therefore make our scam ads reporting form available in the Netherlands in early December. This is an additional way to get feedback from people, which, in turn, helps train our machine learning models. It is in our interest to protect our users from fraudsters and, when we find violators, we will take action to stop their activity, up to and including taking legal action against them in court.”

The court’s judgment ordered Facebook to remove the ads within five days—with a penalty of 10,000 euros ($11,102) per day for failure to comply, up to €1 million ($1.1 million)—and revealed that victims of the scams reported damages of €1.7 million ($1.87 million) to the Dutch government at the time of the summons, Lomas reported

The court also ordered Facebook to provide data to affected celebrities on the accounts that were misusing their likenesses within seven days, with further penalties of €1,000 ($1,101) per day for failure to comply, up to €100,000 ($110,124), Lomas reported, and the company was ordered to pay the case costs.

Lomas reported that Facebook argued that it could not proactively remove the ads because doing so would breach European Union laws against monitoring conditions on internet platforms, but the court rejected that argument, along with another argument by the company that restricting the ads amounted to restricting freedom of expression.

The social network implemented a policy in February 2018 that prohibited ads from promoting financial products and services frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings or cryptocurrency.

Facebook relaxed its policies somewhat that June, allowing ads that promote cryptocurrency and related content from pre-approved advertisers, but still banning ads promoting binary options and ICOs.

And in May, the company waived its pre-approval requirement for ads related to blockchain technology and cryptocurrency industry news, education or events.

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