Four people sued the Japanese arm of U.S. tech giant Meta Platforms Inc. on Thursday over false investment ads using fake celebrity endorsements on Facebook and Instagram.
The plaintiffs, including those from Kobe and Tokyo, filed the lawsuit with the Kobe District Court in western Japan, claiming they had lost money because the company was negligent in verifying the legitimacy of such advertisements. They are seeking a total of 23 million yen ($147,000) in damages.
Social media scams soliciting investments by using the names and images of prominent business figures without their consent have become nationwide problems lately, with the amount of money defrauded reaching around 27.8 billion yen in 2023 alone, according to the National Police Agency.
While the government plans to come up with measures to tackle such crimes around June, a ruling Liberal Democratic Party lawmaker involved in promoting digital issues said Thursday that introducing legal restrictions is possible amid the increasing number of social media scams.
The lawsuit filed on Thursday is believed to be the first seeking compensation from social media operators over damages derived from fake ads, according to the plaintiffs' lawyers.
The lawyers are considering whether to file additional lawsuits as more people have sought their advice about similar incidents.
The four plaintiffs transferred money to designated bank accounts under the impression that they were investing in foreign exchange margin trading after viewing fake advertisements on Facebook and Instagram between August and October last year, according to the lawsuit.
These ads falsely suggested endorsements from Japanese billionaire Yusaku Maezawa, founder of online fashion retailer Zozo Inc., and internet entrepreneur Hiroyuki Nishimura, founder of popular message board 2channel, among others.
The plaintiffs alleged that the company neglected its duty to assess the potential harm to customers and verify the authenticity of ad content while posting fake advertisements and profiting from advertising revenues.
Yasumichi Kokufu, the lead attorney for the plaintiffs, criticized Meta for "not sufficiently checking the scam ads" during a press conference in Kobe.
Meanwhile, a Meta public relations official said the company will refrain from commenting on individual cases.
Meta, formerly Facebook Inc., founded by Mark Zuckerberg, is one of the big technology companies along with Google LLC, Apple Inc., Amazon.com Inc. and Microsoft Corp.
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