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Meta Faces Class Action Suit For ‘Epidemic’ of Counterfeit Ads

April 25, 2022, 2:25 PM

Meta Platforms Inc. is facing a class complaint in California federal court for allegedly profiting from an “epidemic” of advertising scams that steal images of copyrighted work by independent artists and small businesses to sell counterfeit products on Facebook.

The 67-page complaint alleged that Facebook “knowingly assists and encourages” counterfeiters on the platform through “powerful ad tools and lax enforcement.”

Counterfeiters will take the images of art pieces from a copyright owner’s website or e-commerce store and use the image in scam ads that are uploaded to Facebook’s ad platform, the complaint said. It was filed on April 22 in the U.S. District Court for the Northern District of California.

The ads direct users to external websites that appear legitimate, or to a Facebook page that sells counterfeit products.

The platform often fails to comply with ad take down requests from copyright owners, and when it does, counterfeiters will resubmit new ads, creating a “whack-a-mole” model for artists trying to protect their copyrights, the complaint said.

The complaint alleged that when a Facebook user shares a counterfeit ad, it will remain on the user’s page even if the platform takes down the original counterfeit ad.

Facebook claims to have a policy that terminates the accounts of repeat copyright infringers, but doesn’t enforce it, which violates the Digital Millennium Copyright Act, the complaint said.

The DMCA provides safe harbor protections for digital service providers from copyright lawsuits as long as the DSP removes infringing content upon being notified.

The plaintiff, an artist named JL Cook, owns the copyrights to sculptures of snakes and sells them on Etsy, but she found hundreds of ads on Facebook that use her photos of the snakes. Facebook took down many of the ads within 24 hours of receiving DMCA notices, but the ads continued to appear, often from the same accounts, the complaint said.

The plaintiffs’ proposed class and subclass include creators in the U.S. whose creative works were displayed in Facebook advertisements without their consent. The class size is estimated to be in the thousands, the complaint said.

Causes of Action: Direct, contributory, and vicarious copyright infringement; the Visual Artists’ Rights Act; false designation of origin, the Digital Millennium Copyright Act; Flordia Deceptive and Unfair Trade Pratices Act, unjust enrichment.

Relief: Injunctive relief, damages, pre- and post-judgment interest, attorneys’ fees and costs.

Response: Facebook didn’t immediately respond to a request for comment.

Attorneys: Zimmerman Reed LLP represent the plaintiffs.

The case is Cook v. Meta Platforms Inc., N.D. Cal., No. 3:22-cv-02485, 4/22/22.

To contact the reporter on this story: Isaiah Poritz in Washington at iporitz@bloombergindustry.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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