German court holds Meta liable for fraudulent ads on Instagram and Facebook

A German court has ruled that Meta is liable for fraudulent advertisements placed by third parties on its Instagram and Facebook platforms, ordering the company to remove such content and pay damages.

The case was brought by the operator of a German financial portal and its founder, whose trademarked logo and image were used without consent in posts that recommended investments with allegedly fraudulent intent.

The court found that the portal operator reported nearly 260 violations to Meta in August 2024 alone, and that the company took as long as 62 days to remove some of the content.

It rejected Meta's attempt to rely on the lack-of-knowledge defence under the Digital Services Act, reasoning that the platform exercises control over content through its algorithms and advertising practices, unlike purely chronological feeds. The court pointed to a precedent set in a June ruling by the European Court of Justice.

Under the ruling, dated September 16, Meta must also disclose details of the fake advertisements and the revenue generated from them.

A Meta spokesperson said the company disagreed with the decision and was considering its next steps, adding that it had taken significant action, including proactive detection measures and the removal of reported content.

The ruling is not yet final and can be challenged through an appeal.