Federal Court of Australia

Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) (No 3) [2024] FCA 890

ORDERS

THE COURT ORDERS THAT:

1.    The parties provide agreed draft orders giving effect to these reasons to the Associate to Yates J by 4.00 pm on 21 August 2024.

2.    In the event that the parties cannot reach agreement:

(a)    they are to provide drafts of the orders they propose; and

(b)    the question of the appropriate orders to be made will be determined on the papers unless the Court considers that a further hearing on that question is necessary.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

YATES J:

Introduction

1    This proceeding concerns allegations of contravention of various provisions of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)) and the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) by the respondents Meta Platforms Inc (formerly, Facebook Inc) (Meta) and Meta Platforms Ireland Limited (formerly, Facebook Ireland Limited) (Meta Ireland).

2    The first applicant is the Australian Competition and Consumer Commission. The second applicant is the holder of a delegation from the Australian Securities and Investments Commission (ASIC), who is entitled to exercise ASIC’s powers and functions in relation to contraventions of the ASIC Act.

3    The applicants claim: (a) declaratory relief; (b) orders for pecuniary penalties; (c) injunctions; and (d) ancillary relief.

4    The applicants’ originating application was supported by a concise statement. On 9 June 2022, an order was made by consent that the applicants file and serve a statement of claim by 4 August 2022. A statement of claim was duly filed.

5    Between 1 September 2022 and 23 November 2023, the parties corresponded about issues relating to the statement of claim. As a result of that correspondence, the respondents requested the applicants to file an amended statement of claim addressing various issues. The applicants acceded to this request by serving an unfiled amended statement of claim on 23 November 2023. The amended statement of claim addressed some of the issues raised by the respondents. The applicants also provided certain further and better particulars. When serving the amended statement of claim, the applicants’ solicitors indicated that the applicants did not propose to amend their statement of claim to address other issues raised by the respondents.

6    On 27 November 2023, the applicants filed the amended statement of claim. On 6 December 2023, the respondents filed an interlocutory application seeking to strike out various paragraphs of that pleading. These reasons deal with that application.

The relevant statutory provisions

7    There are a number of provisions of the Australian Consumer Law and the ASIC Act that are relevant to this proceeding.

8    As to the Australian Consumer Law, s 18(1) provides:

18 Misleading or deceptive conduct

(1)     A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

9    Section 34 provides:

34 Misleading conduct as to the nature etc. of services

A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any services.

Note:     A pecuniary penalty may be imposed for a contravention of this section.

10    Section 29(1) relevantly provides:

29 False or misleading representations about goods or services

(1)     A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

…

(d)     make a false or misleading representation that a particular person has agreed to acquire goods or services; or

(e)     make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or

(f)     make a false or misleading representation concerning:

(i)     a testimonial by any person; or

(ii)     a representation that purports to be such a testimonial;

relating to goods or services; or

…

11    As to the ASIC Act, s 12DA(1) provides:

12DA Misleading or deceptive conduct

(1)     A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive.

12    Section 12DF(1) provides:

12DF Certain misleading conduct in relation to financial services

(1)     A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any financial services.

Note:     Failure to comply with this subsection is an offence (see section 12GB).

13    Section 12DB(1) relevantly provides:

12DB False or misleading representations

(1)     A person must not, in trade or commerce, in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services:

…

(b)     make a false or misleading representation that a particular person has agreed to acquire services; or

(c)     make a false or misleading representation that purports to be a testimonial by any person relating to services; or

(d)     make a false or misleading representation concerning:

(i)     a testimonial by any person; or

(ii)     a representation that purports to be such a testimonial;

relating to services; or

(e)     make a false or misleading representation that services have sponsorship, approval, performance characteristics, uses or benefits; or

…

Summary of Allegations in the statement of claim

Background matters

14    The following is a summary of some of the allegations pleaded in the amended statement of claim that have bearing on the present application. For ease of reference, I will refer to the amended pleading as, simply, the statement of claim. Where appropriate, I have identified some of the defined terms used by the applicants in the pleading. As yet, no defence has been filed in respect of these allegations.

15    Meta operates the online social network service known as “Facebook” (the Facebook Platform) which is accessible by users through the Facebook website or through apps on mobile devices.

16    The applicants allege that, at all material times until 18 April 2018, Meta Ireland was the contracting party with users of the Facebook Platform in Australia. Since around 19 April 2018, Meta has been the contracting party.

17    Meta is the ultimate holding company of Meta Ireland, and the owner of the domain name facebook.com as well as the intellectual property in the Facebook Algorithms referred to below.

18    In operating the Facebook Platform, Meta collects and stores information about its users (User Data Points) derived from various sources, including the user’s activities on other websites and apps.

19    Each time a user accesses or refreshes his or her feed on the Facebook Platform, Meta shows a curated “news feed” of posts that are unique to them. The news feed may include sponsored posts (i.e., advertisements) for which Meta charges fees to the advertising user (Advertiser).

20    The news feed is derived by processing the user’s User Data Points. This involves deploying multiple layers of machine learning models and rankings to predict which posts (including advertisements) will be most relevant to that user (the Facebook Algorithms). Advertisements can include a hyperlink to an off-platform webpage determined by the Advertiser (i.e., a “landing page”).

21    Meta and Meta Ireland generate substantially all their revenue from advertising, including advertisements shown to users on the Facebook Platform.

22    A Facebook user may submit an advertisement for publication on the Facebook Platform by using certain Facebook Ad Accounts and certain Self-Service Tools, by which the proposed content of the advertisement (including its text, images, videos, and hyperlinks to off-platform locations) is submitted to Meta.

23    Advertisers are required to agree to certain contractual terms, which include compliance with Meta’s Advertising Policies. These policies prohibit advertisements which promote schemes using deceptive or misleading practices.

24    Between January and June 2018, Meta’s Advertising Policies prohibited advertisements which promoted cryptocurrency trading platforms, software and related services, and also products that enabled the monetisation, reselling, swapping or staking of cryptocurrencies. Since June 2018, that prohibition has been subject to Advertisers obtaining prior written approval from Meta to promote such schemes.

25    Once an advertisement is submitted to Meta, it goes through a pre-publication review phase to assess whether it, and its associated landing page, violate the Advertising Policies. As a result of this review, an advertisement will be either approved or rejected for publication on the Facebook Platform. There is an appeal process for rejected advertisements. There is also the possibility of Meta conducting a review of published advertisements. In certain circumstances, Meta may also conduct an Account Level Review.

26    The opportunity to show an approved advertisement to the Advertiser’s target audience is governed by an ad auction system conducted by Meta. If the advertisement “wins” the ad auction for a particular user at a specific time, it is shown on the Facebook Platform to that user in that person’s news feed at that time.

27    Meta’s Advertising Policies prohibit the “cloaking” of landing pages. In this regard, some “bad actor” Advertisers submit advertisements linked to landing pages which attempt to change their appearance depending on whether the landing page is viewed during Meta’s review process or by a Facebook user. The appearance of a landing page will depend on factors such as: (a) the IP address of the device seeking to view the landing page; (b) the characteristics of the device seeking to view the landing page; (c) the configuration of the browser software seeking to view the landing page; and (d) the time at which the landing page is viewed.

28    Where landing pages are cloaked, content may be shown to users who land on those pages that is different to the content that is reviewed by Meta (i.e., Meta will see a “cloak”). In those circumstances, Meta will not have determined whether the different landing page content, which it has not reviewed, violates its Advertising Policies.

29    At material times, Meta or Meta Ireland promised Advertisers using the Self-Service Tools that they will use their best endeavours to deliver the advertisements to the audience specified by the Advertiser in accordance with the outcome specified by that Advertiser.

30    In this regard, as part of the process of submitting an advertisement, the Advertiser uses the Self-Service Tools to designate the campaign objectives and its target audience. This information is fed into the processing undertaken by the Facebook Algorithms. On the basis of the Advertiser’s instructions, Meta deploys the User Data Points and Facebook Algorithms to target the display of the advertisements to the users who are most likely to satisfy the Advertiser’s defined campaign objectives and audience targets.

Celeb-bait cryptocurrency scams

31    The term “celeb-bait” is used by the respondents themselves to refer to advertisements published on the Facebook Platform which promote goods and services involving fake, public figure endorsements.

32    Two paragraphs of the statement of claim are of particular importance to the applicants’ case. The respondents criticise the definitional adequacy of these paragraphs:

63.    Since at least September 2017, Meta Inc has shown to users around the world on the Facebook Platform numerous advertisements which differ in the precise text and images but which all share the following attributes:

(a)    the advertisement features an image of a well-known public figure in the country where the user is located;

(b)    the advertisement contains words which imply that the public figure has had some kind of success or a secret strategy or is otherwise clickbait, and which Meta Inc describes as “Celeb-Bait”;

(c)    the advertisement contains words and/or images which represent that the public figure uses or endorses a particular scheme (which is often a money-making scheme);

(d)    the advertisement contains a hyperlink to a landing page in the form of a purported media article (Deceptive Landing Page) which includes references to a purported interview with the public figure who is said to use or endorse a cryptocurrency trading scheme or platform (Trading Scheme); and

(e)    the Deceptive Landing Page invites the user to sign up to that Trading Scheme,

(Fake Celebrity Endorsement Ads).

64.     Since October 2017, Meta Inc has shown on the Facebook Platform to users in Australia Fake Celebrity Endorsement Ads which link to Deceptive Landing Pages that feature public figures who are well-known in Australia.

            Particulars

(A)     The public figures include David Koch, Dick Smith, Mike Baird, Andrew Forrest, Waleed Aly, Celeste Barber, Chris Hemsworth, Justin Hemmes, Harry Triguboff, Travers Beynon, Karl Stefanovic, Mark Ferguson, Mel Gibson, Mike Amor, Nicole Kidman, Mike Cannon-Brookes, Scott Pape, Eddie McGuire, Daniel Ricciardo, Chris Brown, Liam Hemsworth, Anthony Pratt, Frank Lowy, Russell Crowe and James Packer. Further particulars may be provided following discovery.

(B)     Examples of such an advertisement and landing page are contained in Annexure A to this Amended Statement of Claim.

(C)     Further examples are held by the Applicants and may be inspected by the Respondents by appointment.

33    The applicants allege that, in fact: (a) the public figure did not use or endorse the scheme featured in the Fake Celebrity Endorsement Ad (as defined in paragraph 63 of the statement of claim) or the Trading Scheme featured in the Deceptive Landing Page; (b) the public figure was not involved in the purported interview set out in the Deceptive Landing Page; and (c) the Trading Schemes referred to in the Deceptive Landing Pages are scams in which the promoters misappropriate the funds that are paid by consumers to “invest” in the schemes. As a consequence, it is, and has been, a violation of one or more of Meta’s Advertising Policies to submit Fake Celebrity Endorsement Ads linked to Deceptive Landing Pages.

34    Central to the applicants’ case is the allegation that, since September 2017, Meta has been aware that public figures around the world have complained that their names and images have been used without their consent, and otherwise in a misleading manner, in Fake Celebrity Endorsement Ads shown on the Facebook Platform, and that those public figures have not endorsed the goods or services advertised on the Deceptive Landing Pages. Such complaints have included those by public figures and media organisations in Australia.

35    More particularly, the applicants allege that, since at least January 2018, Meta has been aware that a significant proportion of cryptocurrency advertisements on the Facebook Platform have used misleading or deceptive promotional practices. In this regard, a preliminary analysis of cryptocurrency advertisements has revealed that 58% of the advertisements and landing pages reviewed violated Meta’s Advertising Policies or, potentially, involved scams.

36    Moreover, the applicants allege that, since at least April 2018, Meta has been aware that many Fake Celebrity Endorsement Ads linked to Deceptive Landing Pages on the Facebook Platform are the subject of cloaking.

37    The applicants allege that, after receiving these complaints, Meta has, generally, stopped showing the specific Fake Celebrity Endorsement Ad from the specific Facebook Ad Account the subject of the complaint. In some instances, it has also: (a) investigated other Facebook Ad Accounts connected to the Facebook Ad Account about which the complaint was made (a process called “fanning out”); (b) banned all Facebook Ad Accounts held by the user associated with the particular Facebook Ad Account about which the complaint was made; and (c) banned any advertisement on the Facebook Platform from linking to the URL of the Deceptive Landing Page linked to the particular Fake Celebrity Endorsement Ad (a process called “blackholing”). However, the applicants allege that Meta has continued to show, and earn revenue from, advertisements which, in substance, are the same as those about which complaints have been made, in that the advertisements refer to the same public figure or other public figures and have the attributes pleaded in paragraph 63 of the statement of claim.

38    The applicants allege that at all material times, including on an ongoing basis, Meta has: (a) continued to show to users in Australia, on the Facebook Platform, Fake Celebrity Endorsement Ads which link to Deceptive Landing Pages, and (b) received advertising fees in respect of those advertisements.

39    Further, the applicants allege that Meta has not adopted Reasonable Safeguards which, either alone or in some combination, would prevent or significantly reduce the prevalence of Fake Celebrity Endorsement Ads which link to Deceptive Landing Pages being shown on the Facebook Platform. The applicants have identified these safeguards in paragraphs 84 to 106 of the statement of claim. There are nine such safeguards.

40    Further, the applicants allege that, at all material times, Meta has had the technical ability, or could have developed technology—which could place a warning on advertisements to the effect that users should exercise care as advertisements on the Facebook Platform have falsely suggested that the public figure concerned endorses a money-making scheme or a Trading Scheme—but has not given such warnings.

41    The applicants allege that, from 19 April 2018, each of Meta and Meta Ireland, has represented (amongst other things) that it employs dedicated teams to detect misuse of its products and that it develops advanced technical systems directed to that end. Further, from the same time, Meta’s Data Policy represents that it uses the information it collects about users to verify accounts and activity, combat harmful conduct, detect and prevent spam and other bad experiences, maintain the integrity of its products, and promote safety and security both on and off Facebook products.

Alleged contraventions

42    The applicants plead three categories of contraventions.

43    The first category concerns, in substance, misleading or deceptive conduct (the conduct case). As to this, the applicants plead:

111.     Since October 2017 (and continuing), Meta Inc has:

(a)     made available to Advertisers the Self-Service Tools pleaded in paragraphs 18 and 48 above; and

(b)     deployed User Data Points and the Facebook Algorithms to target users who the Facebook Algorithms predict will engage in a defined way with the Fake Celebrity Endorsement Ads and Deceptive Landing Pages (such as clicking on the link to the Deceptive Landing Page or registering for the Trading Scheme) as pleaded in paragraphs 49 to 53 above; and

(c)     assumed the responsibilities and provided the assurances to users described in paragraphs 80 and 81 above; and

(d)     shown to targeted users in Australia on the Facebook Platform the Fake Celebrity Endorsement Ads linked to Deceptive Landing Pages on the Facebook Platform; and

(e)     failed to:

i.     from the times pleaded in paragraphs 84 to 106 above, adopt the Reasonable Safeguards (alone, or alternatively together or in any other combination) which would have prevented or significantly reduced the prevalence of Fake Celebrity Endorsement Ads which link to Deceptive Landing Pages being shown on the Facebook Platform as referred to in paragraph 82 above; and/or

ii.     warn users in the manner set out in paragraphs 109 to 110 above,

    (Meta Advertising Conduct).

112.     In the circumstances of the knowledge pleaded in paragraphs 67 to 70, 74, 75 and 77 to 78 above, the Meta Advertising Conduct had a tendency, was likely and/or was liable to lead users to believe that:

(a)     the public figure featured in the ads had approved, endorsed, supported and/or acquired the matter the subject of the ad or Deceptive Landing Page; and/or

(b)     the public figure featured in the ads had approved, endorsed, supported and/or acquired the services of, or invested in, a money making scheme; and/or

(c)     the public figure featured in the ads had approved, endorsed, supported and/or acquired the services of, or invested in the Trading Scheme depicted in the Deceptive Landing Page; and/or

(d)     the Trading Scheme featured in the Deceptive Landing Page was legitimate.

113.     In fact:

(a)     the public figure had not done the things referred to in sub-paragraphs 112(a) to 112(c) above;

(b)     the Trading Scheme featured in the Deceptive Landing Page was a scam; and

(c)     the proponents of the Trading Scheme featured in the Deceptive Landing Page scheme misappropriated users’ funds.

114.     By reason of the matters in paragraphs 112 and 113, the Meta Advertising Conduct was and is:

(a)     misleading or deceptive;

(b)     likely to mislead or deceive; and/or

(c)     liable to mislead the public as to the legitimacy of the money making schemes and/or the Trading Schemes, and therefore as to their characteristics or suitability for purpose.

44    The applicants allege that, by this conduct, Meta has contravened, and continues to contravene, ss 18 and 34 of the Australian Consumer Law or, alternatively, ss 12DA(1) and 12DF(1) of the ASIC Act. The applicants make a similar allegation against Meta Ireland in respect of the period up to 13 July 2018. There is no allegation of continuing conduct by Meta Ireland.

45    The second category of contraventions concerns the making of false, misleading, or deceptive representations or representations that are likely to mislead or deceive (the representations case).

46    In essence, the applicants allege that, since October 2017 (and continuing), Meta has represented to users in Australia that the public figures depicted in the Fake Celebrity Endorsement Ads linked to Deceptive Landing Pages have “approved, endorsed, supported and/or acquired the services of or invested in a money making scheme connected with the Fake Celebrity Endorsement Ad”.

47    The applicants allege that, by making these representations, Meta has contravened and continues to contravene: (a) ss 18, 34, and ss 29(1)(d), (e), (f) and/or (g), of the Australian Consumer Law; or (b) ss 12DA(1), 12DF(1), and ss 12DB(1)(b), (c), (d) and/or (e), of the ASIC Act. The applicants make a similar allegation against Meta Ireland in respect of the period up to 13 July 2018. There is no allegation of continuing representations by Meta Ireland.

48    In relation to this category, the applicants also allege that the users with Facebook Ad Accounts who submitted the Fake Celebrity Endorsement Ads linked to Deceptive Landing Pages (Scam Advertisers) made false, misleading, or deceptive representations or representations that are likely to mislead or deceive. In this regard, the applicants plead:

117.     By causing to be shown to users in Australia Fake Celebrity Endorsement Ads linked to Deceptive Landing Pages on the Facebook Platform, since October 2017 (and continuing), the Scam Advertisers have represented to users in Australia:

(a)    that the public figures depicted in those advertisements had approved, endorsed, supported and/or acquired the services of or invested in a money making scheme connected with the Fake Celebrity Endorsement Ad;

(b)    further or alternatively, that the public figures depicted had approved, endorsed, supported and/or acquired the services of or invested in the Trading Scheme described in the Deceptive Landing Page;

(c)    further or alternatively, that the Trading Scheme described in the Deceptive Landing Page was a legitimate money making scheme.

118.     In fact:

(a)    the public figures depicted in the Fake Celebrity Endorsement Ads had not approved, endorsed, supported and/or acquired the services of or invested in a money making scheme connected with the Fake Celebrity Endorsement Ad;

(b)    the public figures depicted in the Fake Celebrity Endorsement Ads had not approved, endorsed, supported and/or acquired the services of or invested in the Trading Scheme described in the Deceptive Landing Pages;

(c)    the Trading Scheme described in the Deceptive Landing Page was not a legitimate money making scheme, and was a scam.

49    The applicants allege that, by making these representations, Scam Advertisers have contravened and continue to contravene: (a) ss 18, 34, and ss 29(1)(d), (e), (f) and/or (g), of the Australian Consumer Law; or (b) ss 12DA(1), 12DF(1), and ss 12DB(1)(b), (c), (d) and/or (e), of the ASIC Act.

50    The third category of contraventions is directed to accessorial liability (the accessorial liability case).

51    In this regard, the applicants allege that Meta has known (and, until 13 July 2018, Meta Ireland knew) that Scam Advertisers had made the alleged representations and that those representations were false or misleading. The applicants also allege that Meta has known (and, until 13 July 2018, Meta Ireland knew) the matters alleged in paragraph 118 of the statement of claim (quoted above). The applicants allege that Meta, on an ongoing basis, and, until 13 July 2018, Meta Ireland, “aided or abetted, and/or were directly or indirectly knowingly concerned in” the Scam Advertisers’ contraventions, as pleaded.

The relief sought in the interlocutory application

52    The relief sought in the interlocutory application is based on paragraphs (c), (d), and (e) of r 16.21(1) of the Federal Court Rules 2011 (Cth):

16.21 Application to strike out pleadings

(1)     A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

…

(c)     is evasive or ambiguous; or

(d)     is likely to cause prejudice, embarrassment or delay in the proceeding; or

(e)     fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; …

53    The first prayer for relief is directed to paragraph 64 of the statement of claim (quoted above). The respondents seek to strike out this paragraph, with leave to replead it:

… to identify, either in the body of the pleading or by way of an Annexure, the actual advertisements which are the subject of any allegation that “Since October 2017, Meta Inc has shown on the Facebook Platform to users in Australia Fake Celebrity Endorsement Ads which link to Deceptive Landing Pages that feature public figures who are well-known in Australia”.

54    Consequent upon this, the respondents seek to strike out a number of other paragraphs of the statement of claim with leave to replead them based on the “actual advertisements” that are identified for the purposes of paragraph 64.

55    The second prayer for relief is directed to paragraph 117 of the statement of claim (also quoted above). The respondents seek to strike out this paragraph, with leave to replead it:

… to identify, using the template in the Annexure to these orders, which specific representation(s) the Applicants allege were made in respect of each advertisement the subject of the allegations [in nominated paragraphs of the statement of claim].

56    Consequent upon this, the respondents seek to strike out a number of other paragraphs of the statement of claim with leave to replead them specifying the actual representations which the applicants allege.

57    The third prayer for relief is directed to a number of identified paragraphs in the statement of claim that allege: (a) “knowledge” by the respondents, and (b) “ongoing” and “future” contraventions. The respondents seek to strike out these paragraphs with leave to replead them either identifying, or confined to, specific matters.

58    The fourth prayer for relief is directed to the question of Reasonable Safeguards. The respondents seek to strike out certain identified paragraphs with leave to replead them to identify which specific combination(s) of safeguards the applicants contend could have prevented or significantly reduced the prevalence of the advertisements the subject of the allegations in paragraph 111 to 134 of the statement of claim.

59    As I will explain, the first prayer for relief is important in determining the fate of the other prayers for relief. The respondents regard paragraph 64 of the statement of claim to be the “core allegation” in the pleading.

60    The applicants submit that there is no proper basis to strike out any part of the statement of claim.

Submissions

Prayer 1

61    As presently pleaded, paragraph 64 of the statement of claim is based on exemplifications of the Fake Celebrity Endorsement Advertisements which have been shown to users of the Facebook Platform in Australia and on which the applicants rely to allege that the respondents have contravened the Australian Consumer Law or the ASIC Act, or have been accessories to the alleged contraventions of Scam Advertisers.

62    Annexure A to the statement of claim provides an example of a Fake Celebrity Endorsement Ad and an example of a Deceptive Landing Page for the purposes of paragraph 64 of the statement of claim. The particulars to paragraph 64 state that “(f)urther examples are held by the Applicants and may be inspected by the Respondents by appointment”. The particulars also provide a non-exhaustive list of persons said to be “public figures” who are “well known” in Australia.

63    The applicants seek to rely on all advertisements that meet the definition of Fake Celebrity Endorsement Ads in paragraph 63 of the statement of claim, which have been shown to users of the Facebook Platform in Australia, regardless of whether the precise advertisements are presently known to the parties or whether the advertisements were shown to users before or after the commencement of the proceeding. They do not wish to be confined to a case that there are only a given number of contravening advertisements.

64    Prior to 16 February 2024, the applicants identified some 600 examples of allegedly Fake Celebrity Endorsement Ads. These examples were provided to the respondents through schedules that gave certain information in relation to each advertisement. The applicants have now revised those schedules. In doing so, they have confined the examples to 234 advertisements.

65    In a letter dated 16 February 2024, the applicants’ solicitors said:

We confirm that the Previous FCEA [Fake Celebrity Endorsement Ad] Examples which have not been identified in the FCEA Example Schedule (around 385) are no longer pressed as examples by the Applicants. Although the matter is only at the pleading stage, in the interests of efficient case management the Applicants have focused on the FCEAs for which there is the clearest evidence linking a FCEA to a Deceptive Landing Page. Further, in a small number of cases, upon further review and having regard to the matters raised by the Respondents, the Applicants have removed about 42 advertisements which did not as clearly fall within the definition of Fake Celebrity Endorsement Ad in paragraph 63 of the Amended Statement of Claim, and about six examples where the landing page did not clearly fall within the definition of Deceptive Landing Page, also in paragraph 63. There are also 22 of the Previous FCEA Examples which were removed because they are duplicates.

66    Nevertheless, the applicants’ solicitors made clear that:

For the avoidance of doubt, the Applicants confirmed that the FCEAs and Deceptive Landing Pages specified in the FCEA Example Schedule are relied upon by the Applicants as examples only, and are not intended to constitute an exhaustive set of all advertisements and landing pages the subject of allegations in the Amended Statement of Claim.

67    By prayer 1(a) of the interlocutory application, the respondents seek an order that the statement of claim be amended to confine the alleged contraventions to specifically identified advertisements. They do not seek to limit the number of advertisements on which the applicants can rely. However, they do want to know the set of specific advertisements which are alleged to involve contraventions of the Australian Consumer Law or the ASIC Act. The respondents advance three principal submissions in support of this relief.

68    First, the respondents submit that the definition of Fake Celebrity Endorsement Ads in paragraph 63 is not sufficiently clear. Although the definition provides broadly expressed attributes of the impugned advertisements, the application of the definition calls for evaluative, and hence likely contestable, judgments about whether those attributes are present in a given advertisement. Who is to be taken as a “well-known public figure” in Australia? What is sufficient for an image of that person to be “featured”? When will a given advertisement be taken as deploying “clickbait”? When will a person be taken to have “endorsed” a particular scheme? When is a landing page to be taken as a “media article”?

69    The respondents argue that these, and other, similar questions loom large. They contend that, for the purposes of determining legal liability, it is one thing to be given an identifiable set of advertisements which are alleged to have the attributes referred to in paragraph 63 of the statement of claim. It is another thing to be given only the attributes and left to decide whether presently unidentified advertisements possess those attributes.

70    The respondents submit that this complaint is real, not theoretical. They contend that, among the (around) 600 examples originally provided by the applicants, a small number of the advertisements did not possess the attributes specified in paragraph 63 of the statement of claim, in that no particulars were provided of a landing page for the advertisement or of an image of the “well-known public figure”. The respondents submit that, even so, the applicants advanced the claim that these were, nonetheless, Fake Celebrity Endorsement Ads for whose publication the respondents were liable.

71    Indeed, in their solicitors’ letter of 16 February 2024, the applicants acknowledged that, previously, they had provided a number of examples of alleged Fake Celebrity Endorsement Ads that “did not as clearly fall within the definition” provided by paragraph 63. The applicants also acknowledged that, in the initially provided examples, there were a large number of advertisements which did not provide “the clearest evidence linking a FCEA to a Deceptive Landing Page”, as well as examples “where the landing page did not clearly fall within the definition of Deceptive Landing Page”. In oral argument, Senior Counsel for the respondents submitted that these apparent concessions show that “clear judgments cannot be made about whether an unidentified ad is part of these proceedings or not”.

72    Secondly, the respondents submit that the applicants’ “definitional approach” without reference to an identified set of advertisements is, beyond the 234 examples provided in the schedule to the 16 February 2024 letter, inadequate to enable them to meet a case that either they or Scam Advertisers made the particular representations alleged in paragraphs 115 to 123 of the statement of claim or that the Meta Advertising Conduct was liable to mislead or deceive users in the particular respects alleged in paragraphs 112 to 114 of the statement of claim. They contend that whether an advertisement makes the alleged representations or has the misleading or deceptive character that is pleaded depends on both context and the content of the advertisement itself.

73    The respondents point to other paragraphs of the statement of claim that create similar difficulties for their defence of the allegations that are made against them. As the respondents put it, the applicants need to identify specific advertisements—not simply unidentified advertisements allegedly having the general attributes pleaded in paragraph 63 of the statement of claim—to enable them to know the case that is brought against them. The respondents contend that, despite paragraph 63 of the statement of claim, the structure of the applicants’ case is, as a matter of substance, “ad specific”.

74    Thirdly, the respondents submit that the applicants “definitional approach” deprives them of the opportunity of properly raising the defence provided in s 251(2) of the Australia Consumer Law:

251 Publication of advertisement in the ordinary course of business

…

(2)        In the proceeding, it is a defence if the defendant proves that:

(a)    the defendant is a person whose business it is to publish or arrange for the publication of advertisements; and

(b)    the defendant received the advertisement for publication in the ordinary course of business; and

(c)    the defendant did not know, and had no reason to suspect, that its publication would amount to a contravention of such a provision.

75    The respondents place emphasis on the proof, in a given case, of para (c) of this provision and how the predecessor provision of s 251 (s 85(3) of the Trade Practices Act 1974 (Cth) (the Trade Practices Act)) has been applied in relation to that element.

76    In Australian Competition and Consumer Commission v Trading Post Australia Pty Ltd [2011] FCA 1086; 197 FCR 498 (Trading Post), when dealing with the defence under s 85(3) of the Trade Practices Act, Nicholas J adopted the approach of Franki J (with whom Bowen CJ generally agreed) in Universal Telecasters (Qld) v Guthrie [1978] FCA 18; 32 FLR 360 (Guthrie).

77    In Guthrie, Franki J reasoned (at 379):

What is necessary under this defence is not a setting-up and policing of a system, but in relation to a particular advertisement, that he did not know and had no reason to suspect that its publication would amount to a contravention of a provision of Pt V.

78    In Trading Post, Nicholas J said (at [204]):

204     Section 85(3), as interpreted by Franki J is not concerned, at least not directly, with the steps which a defendant might have taken to avoid the contravention. Rather, it calls for a consideration of whether the defendant knew or had reason to suspect that publication of the advertisement might give rise to the contravention.

79    The respondents submit that this approach applies equally to the defence under s 251(2) of the Australian Consumer Law. They contend that it will not be sufficient for them merely to prove that they had systems in place to avoid the publication of contravening advertisements. They contend that, as a legal requirement, they must go further and plead their knowledge concerning the publication of each advertisement said to involve, or to have been involved in, the alleged contraventions. They submit that they cannot do this in relation to an unidentified advertisement which is merely alleged to have the attributes pleaded in paragraph 63 of the statement of claim.

80    The applicants emphasise that their case is about “a systematic problem occurring on the Facebook Platform” and that the case must be viewed through that lens. They submit that if they are confined to the 234 examples they have provided, then “what is a fundamental systemic problem in the Facebook Platform looks as though it were a small aberration”. They contend that the evidence will show that a well-known scam is being perpetrated and that the respondents have long been aware of that scam.

81    The applicants seek to differentiate this case from a “traditional advertising case”. They submit that the case is:

… a new type of advertising which is really high volume, really ephemeral, where the advertisers themselves are assisted in various ways by the publisher to create their ads and then target those ads to the users predicted to be most likely to interact with the ads.

82    The applicants submit, further, that their pleading of a class of advertisements (i.e., Fake Celebrity Endorsement Ads) that link to Deceptive Landing Pages is clear and fully particularised. They dispute that the respondents do not know the case they have to meet.

83    In the course of oral submissions, the applicants submitted that the explanation provided in the letter of 16 February 2024 for reducing the number of examples does not suggest that there was “some great confusion” about the definition in paragraph 63 of the statement of claim. The applicants also made clear that they regard the examples that they have provided as merely “illustrative” of the pattern of conduct which they allege and that these examples are simply part of a much larger corpus of contravening conduct which the Court will be invited to infer has taken place and will take place.

84    With regard to the defence under s 251(2) of the Australian Consumer Law, the applicants submit that a defendant’s knowledge, sufficient to raise the defence, can be pleaded at a higher level of generality than the respondents contend. The applicants submit that the “key point” that emerges from the authorities is that “knowledge of a system or type of conduct is enough to fix a defendant with knowledge for the purposes of accessorial liability”.

85    In this regard, the applicants took me to statements in a number of cases in this Court dealing with the attribution of accessorial liability: EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134; 360 ALR 261 at [34]; Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No 8) [2010] FCA 1197; 275 ALR 293 at [160] and [172]; 85 Degrees Coffee Australia Pty Ltd v Fair Work Inspector Rodwell [2020] FCA 1190; 299 IR 280 at [44]; Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 4) [2021] FCA 1242 at [780]; Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 5) [2021] FCA 1345; 394 ALR 403 at [174]. The applicants also took me to Bruce v Williams (1989) 10 MVR 451 at 457 – 458 and Director of Public Prosecutions for Northern Ireland v Maxwell [1978] 3 All ER 1140 at 1145.

86    The purpose of referring to these cases was to advance the proposition that the principles concerning the attribution of accessorial liability inform the application of the publisher’s defence under s 251(2) of the Australian Consumer Law. In accordance with those principles, the applicants contend that the respondents will not be able to avail themselves of the defence under s 251(2) because, given the evidence on which the applicants propose to rely, the respondents:

… will not be able to prove that they did not have knowledge of these ads. They might not have seen the particular advertisement but they were certainly aware of the class of advertisements of which the particular one was a member.

87    In other words, according to the applicants: (a) the respondents cannot avoid accessorial liability because, as a matter of fact, the respondents know that there is a class of advertisement where Scam Advertisers are making the alleged representations; and (b) knowledge of that fact also precludes the respondents from successfully contending that they did not know, and had no reason to suspect, that publication of a particular advertisement on the Facebook Platform in Australia, with the attributes pleaded in paragraph 63 of the statement of claim, would amount to a contravention of the provisions of the Australian Consumer Law on which the applicants rely.

Prayer 2

88    This prayer for relief is directed to paragraph 117 of the statement of claim, although other dependent paragraphs are involved. Essentially, the respondents seek greater specificity as to the connection between each impugned advertisement and the particular false, misleading or deceptive representation or representations that were allegedly made in respect of that advertisement. The relationship between this relief and the relief claimed in prayer 1 is obvious.

89    To some extent, this aspect of the interlocutory application has been met by the revised schedule of advertisements provided by the applicants under cover of their solicitors’ letter of 16 February 2024. The applicants have confirmed that each of the pleaded representations was made in each of the 234 examples given in the schedule. However, the difficulty lies in the applicants seeking to rely on representations allegedly made by presently unidentified advertisements. The respondents contend that, in relation to the approximately 600 examples initially provided by the applicants, it was “obvious” that some did not make all the representations pleaded in paragraph 117. I observe in this regard that paragraph 117 pleads a series of possibly alternative representations.

90    In answer to these submissions, the applicants submit that “every single ad that meets the class we have defined [i.e., Fake Celebrity Endorsement Ads] will give rise to each of those representations”.

Prayer 3

91    The respondents’ submissions in relation to the relief claimed in prayer 3 of the interlocutory application were confined to the applicants’ allegations of “continuing” and “future” contraventions.

92    The respondents seek an order requiring the applicants to distinguish in the statement of claim: (a) the advertisements involved in historical conduct; (b) the advertisements involved in continuing conduct; and (c) the advertisements relating to future contravening conduct. The relief sought by the respondents in relation to the last-mentioned category of advertisements is difficult to comprehend because it appears to be directed to future, unknown advertisements which will have the attributes pleaded in paragraph 64 of the statement of claim. By definition, such advertisements cannot be identified in the way sought in prayer 3(c). They are unknown.

93    In oral submissions, Senior Counsel for the respondents submitted that, in order to enable the respondents to plead to continuing contraventions, the applicants should identify, in the statement of claim, the conduct that is at issue in that regard, so that the respondents can be apprised of, on the one hand, truly historical allegations of contravention and, on the other hand, the allegations of ongoing contraventions.

94    Further, the respondents submit that the statement of claim should make clear whether the applicants are alleging future contravening conduct as distinct from continuing conduct. The distinction between the two species of conduct is not always made clear. Paragraphs 111 and 117 of the statement of claim (quoted above) are examples of that form of pleading. I observe that, in some parts of the statement of claim, two species of conduct appear to be rolled-up. For example, paragraph 82(a) of the statement of claim uses “ongoing” and “continued”, which are apparently intended to refer to two different states:

82.     At all material times (including on an ongoing basis), Meta Inc:

(a)     has continued to show to users in Australia on the Facebook Platform Fake Celebrity Endorsement Ads which link to Deceptive Landing Pages and received advertising fees in respect of those advertisements; …

(Emphasis added.)

95    The respondents submit that if the applicants seek to advance a case based on future contravening conduct, then “we’re in this meaningless territory” or “the world of absurdity”, where allegations of contravention are made by reference to conduct that is presently unknown, which has not happened, and might not happen. Notwithstanding the relief they seek in prayer 3(c) (see [92] above), the respondents submit that such a case cannot be put sensibly. A finding of contravention cannot be made on the mere assumption that something—presently unknown—might have happened or might happen in the future. It follows, axiomatically, that the respondents cannot begin to defend such a case.

96    In oral submissions, the applicants submitted that “(p)rayer 3 … rises and falls on what happens with prayer 1”. They submitted that the alleged contravening conduct is continuing and that there is no reason why they should be required to plead an artificial end date to that conduct. Indeed, they submitted that to do so would significantly understate the gravity of the misconduct they allege.

Prayer 4

97    As I have noted, prayer 4 of the interlocutory application seeks relief directed to the question of Reasonable Safeguards. The applicants allege that, by doing one or more things that were within their power to do, but which they did not do, the respondents could have prevented or significantly reduced the prevalence of the advertisements the subject of the allegations in paragraph 111 to 134 of the statement of claim. The respondents seek orders requiring the applicants to plead the specific combination(s) of safeguards that they allege would have had that effect.

98    This relief is also related to the respondents’ contention that the statement of claim should be amended to confine the alleged contraventions to specifically identified advertisements. They submit that the question whether a particular measure or combination of measures would have or would have had the pleaded effect can only be answered by reference to the content of the advertisement in question.

99    The respondents also submit that in order to understand the applicants’ case they need to know precisely which measure or combination of measures the applicants allege would have, or would have had, the pleaded effect in respect of a given advertisement. Neither the respondents nor the Court should be faced with having to deal with an extremely large number of possible combinations which, arguably, might have the effect for which the applicants contend. The applicants should know, now, what measures would produce, or would have produced, that effect. The respondents submit that now is the time to bring “discipline” to the applicants’ case to avoid the respondents facing the prejudice of having to deal with a large number of counterfactual events.

100    It is to be noted that, in paragraph 111 of the statement of claim, the applicants plead a number of features of Meta’s conduct that, collectively, constitute misleading or deceptive conduct or conduct that is likely to mislead or deceive, or conduct that is liable to mislead the public in a particular way (as to which, see paragraphs 112 to 114 of the statement of claim).

101    One of those features (pleaded in paragraph 111(e) of the statement of claim) is Meta’s failure to adopt the Reasonable Safeguards or to warn users in the manner set out in paragraphs 109 to 110 of the statement of claim. Although paragraph 111(e) is expressed as a failure to adopt “and/or” to warn, the applicants made it clear in the course of oral submissions that these are true alternatives. In other words, had Meta warned users in the manner set out in paragraphs 109 to 110 of the statement of claim, then regardless of whether it adopted the Reasonable Safeguards, its conduct would not have had the character pleaded in paragraph 114 of the statement of claim.

102    As to the Reasonable Safeguards, the applicants pleaded that these “(alone, or alternatively together or in any combination)” would have prevented or significantly reduced the prevalence of Fake Celebrity Endorsement Ads which link to Deceptive Landing Pages being shown on the Facebook Platform. It is the qualification “alone, or alternatively together or in any combination” that ground the respondents’ complaint. However, in their oral and written submissions the applicants explained that had Meta implemented any one of the Reasonable Safeguards then that act would have had the effect pleaded in paragraph 111(e). In other words, had Meta implemented one of the Reasonable Safeguards its conduct would not have had the character pleaded in paragraph 114 of the statement of claim.

Consideration

103    The present interlocutory application does not merely raise pleading issues. It brings into focus case management issues as well.

Prayer 1

104    The respondents’ submissions in respect of prayer 1 are based on the proposition that the applicants have pleaded a case that is “ad specific”. If, by this, the respondents are contending that the applicants’ pleaded case is that each particular Fake Celebrity Endorsement Ad shown to users in Australia on the Facebook Platform since October 2017 gives rise to a discrete contravention of the Australian Consumer Law or the ASIC Act by the respondents, then I do not accept their contention.

105    By reference to the allegations made in preceding paragraphs of the statement of claim, the applicants identify, in paragraph 111, a particular pattern of conduct since October 2017—which includes showing Fake Celebrity Endorsement Ads linked to Deceptive Landing Pages to targeted users of the Facebook Platform in Australia—that constitutes the Meta Advertising Conduct. It is this pattern of conduct—not the publication of a particular advertisement—that is alleged to be misleading or deceptive, or likely to mislead or deceive, or liable to mislead the public in a particular way. The applicants do not plead a case that the publication of each Fake Celebrity Endorsement Ad is and of itself a discrete contravention of the Australian Consumer Law or the ASIC Act, although the applicants could have pleaded such a case.

106    As the applicants bear the onus of proof, they will need to decide which, and how many, advertisements they should adduce in evidence to establish: (a) the pattern of conduct they have alleged; and (b) that the conduct has been of such a nature that it warrants the granting of the injunctive relief the applicants seek. The respondents should not be left in doubt about the case they must meet in that regard. They are entitled to a fair trial of these issues. This requires them to have a “clear and tolerably stable body of allegations of contraventions of law”: Federal Commissioner of Taxation v Ludekens [2013] FCAFC 100; 214 FCR 149 at [20].

107    To this end, the applicants should be required to nominate the advertisements on which they rely to establish these matters. They have already provided 234 examples spanning the period 10 April 2019 to 1 February 2024. On reflection, they might reach the view that these advertisements are sufficient to establish the matters referred to in [106] above. Indeed, they may well consider that it is not necessary to rely on all these advertisements; a subset might well suffice. On the other hand, they may wish to rely on further or other advertisements. Whatever decision the applicants reach, they must endeavour to keep the proceeding within appropriate limits sufficient to sustain the causes of action on which they rely. They must adhere to the dictates of s 37N of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act), mindful of the discretion referred to in sub-s (4) thereof.

108    Therefore, while I do not consider paragraph 64 of the statement of claim to be deficient as a matter of pleading, paragraph (C) of the particulars to paragraph 64 must be confined to identified advertisements. When paragraph 64 is so read, it will enable the respondents to address the pleaded case and to consider: (a) whether the defence under s 251(2) of the Australian Consumer Law is available to them in respect of one or more of the advertisements relied on; and (b) whether there is utility, in any event, in raising the s 251(2) defence in relation to some advertisements when the applicants’ case is based on a pattern of conduct.

109    I hasten to add that the present application does not call for any decision as to whether the respondents can avail themselves of the defence under s 251(2) of the Australian Consumer Law. Still less does it call for any decision as to which of the competing positions advanced by the parties is the correct approach to the application of that provision. As to the last-mentioned matter, there is, plainly, a contestable question whether the principles concerning the attribution of accessorial liability do inform the application of the defence under s 251(2) of the Australian Consumer Law.

110    As to paragraph 63 of the statement of claim, I accept that the definition of Fake Celebrity Endorsement Ads does include features whose presence in a given advertisement may require evaluative judgments to be made. However, that fact, alone, does not mean that paragraph 63, and those paragraphs that are dependent on it, are evasive or ambiguous, or are likely to cause prejudice, embarrassment or delay, or fail to disclose a reasonable cause of action, within the meaning of r 16.21(1). The features in paragraph 63 which call for such judgments can be assessed, in relation to a given advertisement, in a practical and commonsense way.

111    Moreover, it is to be borne in mind that it is for the applicants to establish, to the requisite standard, that a given advertisement has all the attributes pleaded in paragraph 63—for example, that the advertisement features a “well-known public figure” in Australia, or that the advertisement conveys the implications or representations which the applicants plead, or that the advertisement includes “clickbait” (an expression that is now well-understood in ordinary parlance). The respondents bear no onus in that regard.

112    I reach the same overall conclusion on the representations case brought against the respondents. It is clear that paragraph 115 of the statement of claim is based on the same pattern of conduct pleaded in paragraph 111. It is by this pattern of conduct that the applicants allege that the respondents have made the pleaded representations. The making of these representations is not pleaded on an “ad by ad” basis.

113    Consistently, with what I have already said, the pattern of conduct on which the applicants rely for the representations case against the respondents must be particularised in the way I have described. However, as that case is grounded on the same pattern of conduct as the conduct case, this outcome will be achieved by the confinement of paragraph (C) of the particulars to paragraph 64, as I have discussed.

114    The accessorial liability case stands in a different position. The applicants plead this case by reference to the collective conduct and collective contraventions of Scam Advertisers: see paragraphs 117, 120 to 123, and 131 to 134 of the statement of claim. There is no allegation that the Scam Advertisers acted jointly and contravened the Australian Consumer Law or the ASIC Act jointly. Rather, the statement of claim simply aggregates, and does not differentiate between, multiple, discrete contraventions of the Australian Consumer Law or the ASIC Act by multiple, discrete Scam Advertisers. It then pleads that the respondents aided or abetted, or were knowingly concerned in, those contraventions, considered in the aggregate.

115    The respondents might be accessorily liable for the contraventions of a given Scam Advertiser. They might also be accessorily liable for the separate contraventions of other Scam Advertisers, considered individually. If so, these matters can be (and should be) pleaded. But, absent a properly pleaded allegation that the Scam Advertisers acted jointly and contravened the Australian Consumer Law or the ASIC Act jointly, it is not enough for the applicants to simply aggregate disparate alleged contraventions by disparate alleged contraveners and plead that the respondents have aided or abetted, or have been knowingly concerned in, a body of aggregated and undifferentiated contraventions. There is not one cause of action in this regard (as the applicants purport to plead) but multiple different causes of action, each of which must be pleaded, and proved at trial.

116    The respondents have not raised this pleading issue, and (obviously enough) the applicants have not addressed it. In those circumstances, I will give the parties the opportunity to do so. Subject to any submissions they might wish to make, it seems to me that this aspect of the applicants’ pleading requires substantial revision to properly formulate the causes of action they wish to advance in this regard. On the basis that the contraventions of discrete Scam Advertisers should be identified and pleaded, it will be necessary for the applicants to then identify and plead how the respondents are accessorily liable for the alleged contraventions of each such advertiser.

117    It is convenient to mention at this point that, after the applicants have identified the advertisements upon which they propose to rely to establish the (a) conduct and representations case, and (b) the accessorial liability case, and the respondents have filed their defences, it is likely that a case management decision will arise as to how the trial should be conducted to deal with the possibly large number of advertisements that might be involved.

Prayer 2

118    As to the relief sought by prayer 2, I have already referred to the fact that the applicants have made clear that all the pleaded representations are made in each of the 234 advertisements in the applicants’ revised schedule. I have also referred to the fact that, in oral submissions, the applicants contended that each advertisement having the features pleaded in paragraph 63 of the statement of claim makes all the pleaded representations. However, this is not how paragraph 117 is pleaded. By the expression “further or alternatively”, paragraph 117 extends to alternatives and opens the possibility that a given Fake Celebrity Endorsement Ad makes some (one or more) of the representations, but not all of them. This alternatively pleaded case does not identify, with respect to a given advertisement, which of the representations is made. Nonetheless, in light of the applicants’ submissions, paragraph 117 should be amended to remove the pleading of alternatives. Without such an amendment, paragraph 117 is inconsistent with the case that the applicants seek to advance and is, therefore, embarrassing.

Prayer 3

119    As to the relief sought by prayer 3, and subject to the comments made in the following paragraphs, it is obviously futile to require the applicants to attempt the impossible—namely, to identify, and provide particulars of, unknown advertisements that might be published in the future: see prayer 3(c). The Court is concerned with facts, not prophecies.

120    However, as I have noted, the applicants use two expressions in the statement of claim: “ongoing” (paragraphs 82 and 134) and “continuing” (or “continued”) (paragraphs 82, 111, 115, and 117). The distinction between “ongoing” and “continuing” (or “continued”) should be made clear in the pleading.

121    It may be that, by “ongoing”, the applicants intend to mean that the same alleged Fake Celebrity Endorsement Ad has been published on the Facebook Platform to users in Australia on successive occasions and that, by reason of that conduct, the respondents threaten to publish that advertisement to such users in the future.

122    It may be that, by “continuing”, the applicants intend to mean that Fake Celebrity Endorsement Ads are being, and have been, published over time on the Facebook Platform to users in Australia and that, by reason of that conduct, the respondents threaten to publish advertisements, having the features pleaded in paragraph 63 of the statement of claim, to such users in the future.

123    Whatever meaning or meanings are intended, the pleading of “ongoing” and “continuing” (or “continued”) conduct should be clarified, particularly if the applicants propose to contend that different remedial consequences should follow depending on whether conduct, if proved, is “ongoing” or “continuing” (or “continued”). Contrary to the applicants’ submissions, this does not require them to plead an artificial end date to the alleged conduct.

124    The schedule of 234 examples is unclear in this regard and does not remove the problem. In a column titled “Date or date range appears on the Facebook Platform”, the applicants variously use, with reference to a particular advertisement, the descriptions “On at least [a given date]” or “From [a given date] until at least [a given date]”. In each case, it is not clear whether these periods are referring to the publication of the advertisement on a single occasion or the publication of the advertisement on multiple (and, if so, how many) occasions.

Prayer 4

125    As to the relief claimed in prayer 4, I have noted the applicants’ submission that had Meta adopted any one of the Reasonable Safeguards then that act would have had the effect pleaded in paragraph 111(e)(i) of the statement of claim and Meta’s conduct would not have had the character pleaded in paragraph 114.

126    Therefore, the word “alone” in the parenthetical statement “(alone, or alternatively together or in any other combination)”, as used in paragraph 111(e)(i), should be understood as meaning “any one” of the Reasonable Safeguards. Further, paragraph 111(e)(i) of the statement of claim should be understood as meaning that: (a) Meta failed to adopt the Reasonable Safeguards; and (b) had it adopted any one or more of those safeguards then that act (or those acts) would have prevented or significantly reduced the prevalence of Fake Celebrity Endorsement Ads which link to Deceptive Landing Pages being shown on the Facebook Platform.

127    Given this understanding, it is not necessary for the applicants to plead specific combinations of the safeguards that they allege would also have had that effect. This is because, in substance, the applicants’ case is that the respondents failed to adopt any one of several allegedly available safeguards. The pleading of combinations does not add to that case. The effect of the combination is (or would have been) the same as the effect of any one of the safeguards.

128    Contrary to the applicants’ submissions, the respondents are not required to plead, by way of defence, that, had some given combination of the Reasonable Safeguards been adopted, that combination, but not one of the safeguards alone, would have had the alleged effect. The respondents need only plead to the applicants’ case.

129    Further, as I understand the applicants’ submissions, had the respondents either: (a) adopted any one of the safeguards (which, itself, would have prevented or significantly reduced the prevalence of Fake Celebrity Endorsement ads which link to Deceptive Landing Pages being shown on the Facebook Platform); or (b) warned users in the manner set out in paragraphs 109 to 110 of the statement of claim (regardless of whether they also adopted one of the Reasonable Safeguards), the respondents’ conduct would not have had the character pleaded in paragraph 114 of the statement of claim.

130    The statement of claim should be amended to reflect these understandings and to confine the applicants’ case accordingly.

Conclusion

131    In summary:

(a)    the applicants must commit to identified advertisements for the purposes of paragraph 64 of the statement of claim and the other allegations that depend on or incorporate the allegations in that paragraph;

(b)    subject to hearing further from the parties, the accessorial liability case should be repleaded taking into account the observations made at [114] – [115] above;

(c)    paragraph 117 should be repleaded to remove the pleading of alternatives, given that the applicants’ intended case is that each advertisement makes all the pleaded representations;

(d)    paragraphs 82, 111, 115, 117 and 134 should be repleaded to make clear the meaning of “ongoing” and “continuing” (or “continued”) and the distinction between those terms; and

(e)    paragraph 111(e) should be repleaded to make clear that the respondents alleged failure was to adopt any one of the Reasonable Safeguards and to make clear that paragraphs 111(e)(i) and 111(e)(ii) are alternative, not cumulative, failures for the purposes of paragraph 114 of the statement of claim.

Costs

132    The respondents seek their costs of the strike-out application. The applicants contend that the costs of the application should be costs in the cause.

133    Each party has had a measure of success in respect of the relief sought in prayer 1. This was the area of major debate. On the one hand, I am not satisfied that the pleading of paragraph 64 is deficient. On the other hand, I am persuaded that the applicants must commit to identified advertisements. Other than in respect of the accessorial liability case, the other matters that require repleading are relatively minor amendments that should give greater clarity to the case that the applicants wish to bring. My concern about the pleading of the accessorial liability case is a matter that I have raised.

134    In the circumstances, my provisional view is that the costs of the strike-out application should be costs in the cause. However, I will reserve the question of costs until after hearing from the parties on the pleading of the accessorial liability case (assuming that the parties wish to be heard on that matter).

Disposition

135    The parties should bring in agreed orders giving effect to these reasons.

Associate:

Dated:    9 August 2024