• by Wendy Davis  @wendyndavis, November 15, 2022

Two Meta Platforms users who say they were bilked by advertisers on the service are asking a federal appellate court to revive a lawsuit accusing the company of soliciting fraudulent ads.

“Meta has done much more than passively create and maintain a platform on which scammers can target users with scam ads,” lawyers for Oregon resident Christopher Calise and Nebraska resident Anastasia Groschen argue in papers filed Monday with the 9th Circuit Court of Appeals.

“According to internal Meta documents, and current and former Meta employees and contractors recently interviewed by various investigative journalists at prominent publications, Meta proactively facilitates the publication of illegal ads on its Facebook platform,” they add.

They are asking the 9th Circuit Court of Appeals to reverse U.S. District Court Judge Jeffrey White's decision dismissing the case at an early stage. He ruled in April that Section 230 of the Communications Decency Act protects Meta from liability over ads created by outside companies.

The battle dates to August of 2021, when Groschen and Calise alleged in a class-action complaint brought in U.S. District Court for the Northern District of California that they lost money after responding to ads on Facebook.

Calise alleged that he lost around $49 after attempting to purchase a car-engine assembly kit that was advertised on the site. He paid with a debit card, but the merchandise never arrived and he couldn't obtain a refund, according to the complaint.

Groscen said she lost around $31 after attempting to purchase an activity board for her toddler, after clicking through a Facebook ad for the product. Instead of the activity board, she received “a cheap wooden” puzzle, according to the complaint.

Calise and Groscen are asking the 9th Circuit to rule that Meta wasn't entitled to the protections of Section 230, given the allegations that the company “facilitated the publication of illegal ads” on the platform.

The pair alleged in their complaint that Facebook solicited ad sales in China despite an internal study allegedly showing nearly 30% of ads placed by China-based advertisers violated a Facebook policy, and that Facebook encouraged lax enforcement of its ad policies.

Lawyers for Calise and Groscen argue to the appellate court that those allegations center on Meta's conduct, not the content of the ads.

White rejected that theory when he dismissed the lawsuit. He wrote that even if the allegations in the complaint were proven true, they would only show that Meta hosted ads created by third parties.

White added in his ruling that the allegations wouldn't establish that Meta “required advertisers to post specific content, made suggestions about the content of the ads, or played a role in creating the unlawful ads.”

More than 10 years ago, Google defeated a similar lawsuit over allegedly fraudulent ringtone ads in the search results.

"Providing third parties with neutral tools to create Web content is considered to be squarely within the protections of (the law)," a federal judge wrote in that matter. "Even if a service provider knows that third parties are using such tools to create illegal content, the service's provider's failure to intervene is immunized,” the judge added.