Federal Court of Australia

Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) (No 4) [2025] FCA 1084

ORDERS

THE COURT ORDERS THAT:

1.    The respondent’s application is dismissed.

2.    Leave is granted to the applicants to file its further amended statement of claim and amended originating application.

3.    The respondent is to pay the applicants’ costs, to be agreed or assessed.

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

REASONS FOR JUDGMENT

ABRAHAM J:

1    The proceeding brought by the Australian Competition and Consumer Commission (ACCC) alleges contraventions 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 respondent Meta Platforms Inc (formerly, Facebook Inc) (Meta). On 9 August 2024, Yates J made an order striking out the applicants’ statement of claim: see Australian Competition and Consumer Commission v Meta Platform, Inc (formerly Facebook, Inc) (No 3) [2024] FCA 890 (Meta (No 3)) (noting also the discussion as to the basis of the ACCC’s case in a consequent hearing on 4 June 2025). These reasons address a second strike out application made by Meta, in relation to the further amended statement of claim (FASOC). If the application is refused, the FASOC can be filed, with the amended originating application.

2    It is unnecessary to repeat the overview of the case as described in the reasons of Yates J (as discussed or clarified at the consequent hearing), or the relevant statutory provisions. Suffice to say, the ACCC described its case during this hearing as:

…proceedings in respect of scam cryptocurrency advertisements on Facebook, the ubiquitous global social media platform operated by the Respondent (Meta). This is not a case about traditional media advertising. Meta’s business model is one where billions of different advertisements are published every day to targeted users of the Facebook Platform. Meta supplies advertisers with the tools they need to construct and target the advertisements, and makes it possible for any given advertiser to easily and quickly create many different types of advertisements. Every single user has a different “news feed” of posts (including advertisements) curated for them (or targeted to them) by Meta’s algorithms.

3    The scam involves a subset of what are described as Celeb-Bait advertisements which feature public figures well known in Australia. When the links in the advertisements are clicked, the users are taken to landing pages, and the public figures are portrayed as using, adopting and endorsing a cryptocurrency trading product. The user is encouraged to sign up to that product. The ACCC submitted this is how the scammers elicit the details of users in the real world.

4    In summary, the case is bought on three bases: a conduct case, a misleading representation case and an accessorial liability case.

5    Meta seeks that the whole of the FASOC be struck out, or in the alternative, the following paragraphs of the FASOC be struck out:

(1)    allegations concerning safeguards and placement of warnings that lack a factual link to the Annexure A Ads, being [87]-[90], [95]-[110] and [113]-[114];

(2)    allegations describing the alleged safeguards as “reasonable” (to the extent they use the word “reasonable”), being [85], [111], [112] and [115(d)(i)];

(3)    allegations concerning the effect of reasonable safeguards, being [85], [100], [111] and [115(d)(i)];

(4)    allegations concerning accessorial liability, being [125], [128], [129]-[131] to the extent they refer to the Scam Advertisers’ representations, and [137]-[142]; and

(5)    allegations that are otherwise vague and embarrassing, at [75]-[78].

6    As is apparent, the first three complaints all centre on the pleadings in respect to the reasonable safeguards. There is then a complaint about the pleading in respect to accessorial liability, and an allegation that certain pleadings are vague and embarrassing.

7    Apart from the allegation in respect to paragraphs being vague and embarrassing, the complaints relate to the ACCC’s conduct claim.

Legal principles

8    The relevant principles applicable to the determination of an application to strike out pleadings are well established, and it is unnecessary to repeat in detail. Given the submissions advanced by the respondent, it suffices for present purposes to recall the following. A strike out application is directed to the sufficiency of the pleadings or equivalent documentation, as opposed to the underlying prospects of success of the proceedings: Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 (Spencer) at [23]. The main purpose of a pleading is to give notice to the other party of the case it has to meet: Thomson v STX Pan Ocean Co Pty Ltd [2012] FCAFC 15 (Thomson) at [13]. Pleadings are not an end in themselves, instead they are a means to the ultimate attainment of justice between the parties to litigation: Banque Commerciale SA (in liq) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 293. For the purposes of Federal Court Rules 2011 (Cth) r 16.21(1)(e), a “reasonable cause of action” is one that has some chance of success having regard to the allegations pleaded: Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2012] FCAFC 97; (2012) 203 FCR 32 at [42]-[43]; Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629 (Chandrasekaran) at [108]-[111]. A cause of action cannot be struck out merely on the basis that it appears to be weak: Chandrasekaran at [108]; Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd [1994] FCA 636; (1994) 217 ALR 226 at 236. That said, summary processes must not be used to stultify the development of the law: Spencer at [25]. As the Court observed there:

Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained.

9    It follows that particular care should be taken where the applicants’ cause of action is novel. Kirby J observed in British American Tobacco v Western Australia [2003] HCA 47; (2003) 217 CLR 30 at [103]:

In the case of novel causes of action, a measure of caution should be exercised in providing summary judgment. This is especially so where the facts, adduced at trial, might cast light and colour upon the resolution of the legal questions.

10    The Federal Court Rules in relation to pleading requirements must be interpreted and applied considering s 37M of the Federal Court of Australia Act 1976 (Cth), which provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law as quickly, inexpensively, and efficiently as possible: Chandrasekaran at [101]; Australian Competition and Consumer Commission v NQCranes Pty Ltd [2021] FCA 1270 (NQCranes) at [14]. In that context, as I observed in NQCranes at [15], at least in contemporary times with the development of case management procedures, it has been recognised that courts do not take an “unduly technical or restrictive approach to pleadings”, provided they fulfil their function: Thomson at [13], citing Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [4]-[8]; and see Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2021] FCAFC 121; (2021) 287 FCR 388 at [152].

Consideration

11    There are three preliminary observations.

12    First, the respondent’s submissions proceeded to analyse paragraphs of the statement of claim in a vacuum and criticise them in that context. The document must be considered holistically, not in a piecemeal fashion. Although the respondent takes issue with the suggestion that that is the approach they have taken, a consideration of their submissions reflect otherwise.

13    Second, the respondent challenged aspects of the FASOC which were in the original statement of claim (SOC), yet no challenge was made previously. That is, issues are now being raised as significant issues to the sufficiency of the pleading when the point, if correct, was available to have been made on the last occasion (in relation to the original pleadings). This reflects on whether the deficiency now claimed, was as obvious as contended, or rather, reflects an approach by the respondent as one searching for a deficiency or error. As a general observation, an approach to the conduct of proceedings where a party fails to take a pleading point which it considers to be a genuine one when making a strike out application, on the basis that it may be taken in a later application, is inconsistent with s 37M. An applicant in repleading is entitled to approach that task on the basis that complying with a Court’s ruling is sufficient.

14    Third, it is apparent from the respondent’s submissions that there is no misunderstanding of the case it is to meet, but rather it takes issue that the case can be advanced on this basis.

Reasonable safeguards

15    I address these complaints together.

16    The ACCC described its conduct case as follows:

Conduct case: As to the first set of contraventions in respect of Meta’s conduct, the ACCC alleges that Meta engaged in misleading or deceptive conduct, in contravention of ss 18 and 34 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) (ACL) and equivalent provisions of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) each time it published an Annexure A Ad on Facebook by (FASOC [115]-[119], [133]-[134]):

a)    engaging in the “Meta Advertising Conduct”, being the relevant aspects of Meta’s business model (for example, using its algorithms and data to target users, providing assurances to users) and Meta’s failure to implement the reasonable safeguards or place warnings on ads;

b)    by reason of (a), in the circumstances of Meta’s knowledge, causing users to wrongly believe:

i)    the public figure in the ad had approved, endorsed, supported and/or acquired the services of, or had invested in, the money making scheme shown in the ad, or the Trading Scheme shown on the landing page; or

ii)    the Trading Scheme in the landing page was legitimate.

17    In practical terms, the focus of Meta’s submission is alleged deficiencies in [115(d)(i)]. Meta submitted that FASOC alleges it did not, but could have, adopted the so-called “reasonable safeguards” and, had it done so, such “safeguards” might have “prevented” or significantly reduced the prevalence of Celeb-Bait advertisements on the Facebook platform. It submitted that these allegations necessarily make assertions of causality between a measure (each alleged “safeguard”) and a target (the universe of advertisements defined as “Celeb-Bait” which is broader than the advertisements identified in Annexure A). Meta submitted that the FASOC also needs to, but does not, identify the connection between the safeguard and each Annexure A Ad. It submitted the nature of the safeguards alleged are such that the connection is not self-evident. In making submissions Meta contended, inter alia, that they do not understand the term Celeb-Bait, which is said to be inadequately pleaded. It also contended that the use of the word reasonable is distracting, ill-defined and leads to unwieldy allegations. It submitted the problem to be addressed, identified by Yates J, has not been. That is, that by the terms of [115(d)], the ACCC is not confining its case to identified advertisements.

18    I do not accept the submissions.

19    First, the concept of reasonable safeguards was pleaded in the original SOC which was considered by Yates J. Although the respondent made a strike out application which included the equivalent of [115(d)(i)], it was on a confined basis. That was described in Meta (No 3) at [102] as follows:

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.

20    His Honour concluded at [126]-[127]:

[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.

21    His Honour concluded that the statement of claim should be amended to reflect that understanding. The FASOC does so. I note that his Honour did not appear to otherwise have issue with this aspect of the pleadings or the reasoning underpinning it.

22    Meta did not challenge the use of the term reasonable in the SOC. Nor did they challenge the reasoning process in the manner now contended.

23    Meta’s response during the hearing of the application, when asked by the Court why the complaint made about the use of the term reasonable was not made on the last occasion, was that there were “so many problems” with the last pleading, and this was “so far down the batting order”. This response provides no proper explanation. It tells against the respondent’s submission that it impacts on its ability to understand the case. If Meta considered it a problem, it was one which it considered was not material enough to include in the previous strike out application. It reflects an approach by the respondent as one of searching for a deficiency.

24    The point was not taken in the original application because it has no merit. In my view no proper issue arises in respect to the use of the term reasonable in the FASOC. Further, as referred to above, this is also an illustration of the respondent considering a paragraph in a vacuum. The word has an ordinary meaning and is well understood. It is a term defined earlier in the pleadings. The FASOC at [87] onwards (leading to the impugned paragraph [115(d)]) pleads what that term means, identifies what those safeguards are and why, and how they could have been implemented. What is said to have been the impact if those safeguards were implemented, given the nature of the safeguards pleaded, is self-evident on the pleadings. The connection between the safeguards and the Annexure A Ads is pleaded. I do not accept the respondent’s submission to the contrary.

25    Second, in accordance with the ruling of Yates J, the ACCC has confined its case such that the contraventions are based on the 245 advertisements identified in Annexure A. Contrary to the respondent’s submissions, the FASOC does not suggest otherwise. Paragraph [115(d)(i)] does not do that. I do not consider the ruling of Yates J prevents the ACCC, who are relying on those identified 245 advertisements as the only basis of contraventions, from presenting the proof of those matters in the context of what it alleges is the business model adopted by Meta. To prevent that approach, given the allegations, would be artificial. The submission does not grapple with the reasoning as pleaded.

26    Third, the pleading identifies features that would identify an advertisement as a clickbait or Celeb-Bait advertisement. The pleading also identifies those features in the 245 Annexure A Ads, the subject of the contraventions.

27    The ACCC case is that Meta knows it has a problem with Celeb-Bait advertisements (and there is documentation to show that it has a problem with cryptocurrency trading scams). It is alleged that Meta’s knowledge of its processes being abused is relevant to issues of accessorial liability. It is also said to be relevant that, given the knowledge of Meta, it has not put appropriate guardrails in place to address these scams. The business model of Meta is pleaded in detail and as pleaded, is relevant to the proof of the allegations.

28    In the context of Meta’s system or business model, the ACCC pleads that if any one of the reasonable safeguards had been adopted, that would have prevented or reduced Celeb-Bait advertisements and advertisements with attributes of Annexure A Ads, and therefore would have reduced the likelihood that a particular Annexure A Ad was published. The respondent submitted that it does not take issue with the ACCC relying on the business model but that [115(d)(i)] adds a causal element, to which the business model reasoning is insufficient as it requires proof of an effect on both the Annexure A Ads, and the unidentified advertisements. That cannot be accepted. That connection is not relying on proof of other advertisements, but rather given the safeguards, advertisements with certain attributes (those of the Annexure A Ads) would have likely been reduced. As the Annexure A Ads have those characteristics, it follows that publication of the Annexure A Ads would have likely been reduced. Contrary to the respondent’s submission, that reasoning is not dependent on the identity of any other unidentified advertisement. That reasoning in the FASOC does not require identification or proof of any specific advertisements apart from by their characteristics, over and above the Annexure A Ads.

29    I also do not consider that there is any lack of understanding by the respondent as to what is meant by clickbait advertisements, as referred to in the pleadings. Their attributes are identified in the pleadings, with the Annexure A Ads having those attributes. The evidence on the application, which includes Meta’s responses to s 155 Notices, are consistent with Meta’s understanding of clickbait advertisements. Meta has answered a series of s 155 Notices by reference to defined terms similar to Celeb-Bait advertisements and advertisements with Annexure A attributes. There is an artificiality to this complaint.

30    Nor do I consider it necessary to plead matters of the nature identified by the respondent in Schedule 2 to its written submission. That is not the way the ACCC is presenting its case. The case is based on the business model of Meta. That has always been apparent on the pleadings. The ACCC explained the legal basis for its approach, referring inter alia, to the observations of Hayne J in Google Inc v Australian Competition and Consumer Commission [2013] HCA 1; (2013) 249 CLR 435 in its written submission at [29]:

These observations, and the emphasis on the alleged contravener’s “conduct”, in his Honour’s reasons form the basis for the ACCC’s conduct case. In particular, in the FASOC, the ACCC:

a)    begins, as Hayne J suggests, by asking what the conduct of Meta was. That is defined as the “Meta Advertising Conduct”, being the relevant aspects of Meta’s business model (for example, using its algorithms and data to target users and providing assurances to users), Meta’s failure to implement the reasonable safeguards or place warnings on ads, and Meta showing each Annexure A Ad to a targeted user of the Facebook Platform in Australia: FASOC [115]-[116]. No representations are alleged in those paragraphs of the FASOC;

b)    alleges that in the circumstances of Meta’s knowledge, each instance of the Meta Advertising Conduct was likely to lead users to wrongly believe (FASOC [117]-[118]):

i)    the public figure in the ad had approved, endorsed, supported and/or acquired the services of, or had invested in, the money making scheme shown in the ad, or the Trading Scheme shown on the landing page; or

ii)    the Trading Scheme in the landing page was legitimate; and

c)    in the premises, alleges that Meta engaged in misleading or deceptive conduct, in contravention of ss 18 and 34 of the ACL and equivalent provisions of the ASIC Act each time it published an Annexure A Ad on Facebook (FASOC [119], [133]-[134]).

31    The respondent’s complaints tend to reflect, in large part, a conceptual issue with the approach taken by the ACCC, as opposed to a lack of understanding. Whether the reasoning relied on by the ACCC is sufficient to establish the contraventions can only be determined in the substantive hearing. The respondent has not established that this aspect of the pleadings should be struck out.

Accessorial liability

32    The ACCC describes its case on accessorial liability as follows:

[51]    The ACCC has articulated its case regarding the knowledge it says Meta held, founding its allegation of accessorial liability in FASOC [141] (and the particulars thereto). In summary, the ACCC contends Meta knew:

a)    the Facebook platform displayed, and would likely continue to display, Celeb-Bait Ads and ads with the attributes of the Annexure A Ads;

b)    Meta’s ad review processes and advertising processes did not prevent such ads from being displayed;

c)    by reason of the matters in (a) and (b), that advertisements displayed on the Facebook platform would make the representations the ACCC alleges the scam advertisers made in the Annexure A Ads (eg, that the public figure endorsed the Trading Scheme shown on the landing page); and

d)    the content of ads and that they would be published on the Facebook platform (including the Annexure A Ads). The ACCC does not allege any particular individual employed by Meta knew the precise content of the Annexure A Ads at the time they were published on the Facebook platform. Rather, the ACCC alleges that such knowledge should be attributed to Meta based on the content of its records and systems. This is an example of what Edelman J referred to in Productivity Partners at [237]-[238] as the “alternative path” of attributing an act or intention to a corporation by reason of the operation of its systems, rather than by identifying a particular person within the corporation as carrying out the act or having the specific intention.

[52]    As can be seen, while the ACCC alleges that Meta knew the content of Annexure A Ads before they were published, it does not allege any human at Meta had specific knowledge that any particular Annexure A Ad made representations that were misleading or deceptive. Instead, the ACCC relies upon Meta’s knowledge that there was an ongoing problem with Celeb-Bait Ads making these representations on the platform more generally.

33    The respondent submitted that the case based on accessorial liability is devoid of merit. The respondent submitted the issue between the parties is not whether for an accessory to be liable for the conduct of another, it must be proved that it knew the essential facts constituting the contraventions. The ACCC submitted it is a matter for debate at trial whether the knowledge they plead and propose to establish is sufficient. Meta urged the Court to find at this stage that the accessorial liability case has insufficient prospects to proceed. This is because in summary it contended that the ACCC is required to plead and prove that Meta knew at the time an Annexure A Ad was shown on its platform, that Annexure A Ad was misleading or deceptive. The ACCC submitted that is not necessary, and that to find accessorial liability it is sufficient to demonstrate that Meta knew the essential elements of the contravention is met by: (i) Meta’s knowledge of the significant and far-reaching problem of Celeb-Bait advertisements, and (ii) Meta’s knowledge, by reason of its own ad-review system, of the content of each Annexure A Ad, shortly prior to the advertisement appearing on the Facebook platform: see FASOC [114].

34    The ACCC accepted that its approach involves a degree of novelty but submitted this is unsurprising in circumstances where existing legal principles are being applied to modern modes of business. In support of its submission, the ACCC referred to several authorities which for present purposes are unnecessary to discuss. The respondent distinguished the cases relied on. In the circumstances of this case, it is not appropriate to determine whether the authorities assist, on a strike out application. The respondent’s approach would be to resolve this legal issue on the pleading alone. In practical terms, as the ACCC submitted, whether Meta knew the essential elements of the contraventions by the scam advertisers is a question of fact, or at least, a mixed question of law and fact. I agree.

35    As referred to above, care needs to be taken, such as to not stultify the development of the law. This is in a context where, as the respondent submitted, unlike advertising on traditional media, advertising online is automated and high-volume, with no human reviewing and assessing each advertisement. The issue of what is necessary to establish the knowledge an internet platform is required to hold to be accessorily liable is likely to have significant and broad implications. It is a matter of public interest.

36    Whether the ACCC can establish its case on this basis can only be properly determined at the substantive hearing. In the circumstances, I do not consider that this aspect of the pleading should be struck out.

Vague and embarrassing

37    This complaint goes to [75]-[78] of the FASOC which the respondent argued is vague and unconfined, such that Meta cannot understand their scope.

38    These paragraphs, in particular [75], which appears to be the focus of the submission based on a lack of specificity, appears to be generally in the same terms as in the original SOC, to which no complaint was made. The structure of [75] and the degree of specificity for the particulars then provided is no different. As with other aspects of these submissions, if this was a matter of concern it would be expected that the complaint would have been made. In that context, to suggest it is a “very large criticism” is difficult to understand. The suggestion that the lack of understanding of terms such as a “complaint” cannot be accepted. It is a term with an ordinary meaning, which can be readily understood.

39    As the ACCC contended, properly read, the FASOC at [75] identifies the subject matter of the complaints (Celeb-Bait advertisements and advertisements with Annexure A attributes), the time period in which they were received (since January 2018), and who made the complaints (Ms Mia Garlick of Facebook Australia Pty Ltd, public figures, media organisations and users in Australia). There are detailed particulars in Annexure G, by reference to each person alleged to have made complaints. I do not consider the pleading is vague. That the pleading may be supplemented if the ACCC becomes aware of other information, does not alter that. The respondent knows the case it has to meet.

Conclusion

40    The respondent’s application to strike out some (or all) of the FASOC is dismissed.

41    The ACCC has leave to file the FASOC and amended originating application.

Associate:

Dated:    5 September 2025