• by Wendy Davis  @wendyndavis, July 8, 2024

Meta Platforms is seeking to immediately appeal a ruling that allows Australian billionaire Andrew Forrest to proceed with claims over fraudulent cryptocurrency ads that used his name and image.

The company argues in court papers filed last week that a speedy appeal would resolve unsettled questions about web publishers' liability for ads created by third parties, but with help from publishers' artificial intelligence tools.

“Given the complexity and novelty of this area of law, this case would benefit from the Ninth Circuit’s input before proceeding to expensive and protracted litigation,” Meta writes in a motion asking U.S. District Court Judge P. Casey Pitts in the Northern District of California to authorize an appeal.

The dispute dates to 2021, when Forrest sued over phony ads that use his name and image to promote fake cryptocurrency schemes. His complaint included claims that Meta misappropriated his image, and that the company was negligent in reviewing ads on its platform.

Meta sought an early dismissal, arguing that it was immunized by Section 230 of the Communications Decency Act. That law broadly protects web companies from lawsuits over material created by advertisers and other third parties. But Section 230 also has some exceptions, including one that applies when web companies develop illegal content.

Forrest contended that his claims fell within that exception, arguing that Meta allegedly helped develop the fake ads by offering ad software that “drives and ultimately determines what the completed, paid-for ads will look like, and who will see them.”

Pitts sided with Forrest, effectively ruling that his claims warranted further proceedings.

Pitts said in the ruling that the allegations “present a factual dispute regarding whether Meta's ad systems were neutral tools that anyone could use (or misuse) or whether the tools themselves contributed to the content of the ads, including to the aspects of the content that are allegedly illegal.”

Meta now wants the 9th Circuit to immediately review that decision.

“The law of Section 230 is rapidly evolving,” Meta writes. “No court of appeals has yet directly addressed Section 230 immunity in the context of automated tools or 'generative AI' that allegedly automatically optimizes the material published on a website to increase audience engagement.”

Meta also says its tools allegedly automatically optimize an ad “regardless of whether that ad is a 'scam ad' or legitimate, and regardless of whether the ad involves an improperly obtained photograph or it does not.”

Pitts' ruling came the same month the 9th Circuit revived a separate lawsuit against Meta over scam ads. In that matter, a panel of the 9th Circuit allowed two Facebook users to proceed with claims that the company violated its terms of service by allegedly failing to police Facebook ads placed by fraudsters.