• by Wendy Davis , 3 hours ago

Meta is pressing a federal appellate court to shut down a lawsuit by Facebook users who say they lost money after responding to fake ads on the platform.

In papers filed late last week with the 9th Circuit Court of Appeals, the company says its terms of service "do not promise that Meta will accomplish the impossible task of preventing a user from ever being exposed to misleading content."

Instead, Meta argues, statements in the terms of service -- including that it will take "appropriate action" if it learns of harmful content -- serve to warn users that the material they posted might be removed.

The original complaint, which drew from reports in publications including The New York Times and BuzzFeed , alleged that Facebook's sales force “aggressively” solicits ad sales in China even though an internal study allegedly showed nearly 30% of ads placed by China-based advertisers violated a Facebook policy.

The plaintiffs claimed Meta failed to honor representations regarding how it handled harmful content. In addition to saying it would "take appropriate action" if it learned of harmful content, Meta also said it removes material that "purposefully deceives, willfully misrepresents or otherwise defrauds or exploits others for money or property.” (Meta's current terms say it "may" take appropriate action regarding harmful content.)

U.S. District Court Judge Jeffrey White in the Northern District of California ruled last year that the allegations, if proven true, could support claims that Meta broke its contract with users and violated its duty of good faith.

Meta is now appealing that decision to the 9th Circuit, arguing that its terms of service and community standards govern users' conduct, and do not impose obligations on the company.

The plaintiffs disagree, arguing in papers filed in July that Meta's representations obligated it to take action against deceptive ads.

Earlier in the proceedings, Meta argued that it was protected from all claims by Section 230 of the Communications Decency Act, which broadly immunizes web companies from liability for posts by third parties -- including advertisers.

The 9th Circuit ruled in 2024 that Section 230 didn't protect Meta from allegations that it broke its contract with users by violating its own terms of service, but the court also said at the time that it wasn't clear whether the terms of service created an enforceable contract.

The circuit court is expected to hear arguments in the matter early next year.

Meta currently faces at least two other lawsuits over online scams -- including one brought in April by the watchdog Consumer Federation of America, and one brought two weeks ago by people who lost money after responding to Facebook and Instagram ads that promoted fraudulent crypto schemes.