Meta Platforms Faces Potential $3.62 Million Fine Over Fraudulent Ads Linked to Brazilian Retailer Havan

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Meta Platforms Inc. is at risk of incurring a fine of up to $3.62 million following a recent lawsuit filed by Havan, a prominent Brazilian department store chain. The lawsuit alleges that Meta accepted and displayed fraudulent advertisements using Havan’s name and the image of its owner, billionaire Luciano Hang, to deceive consumers.

On Monday, a judge in Santa Catarina state ruled against Meta, ordering the company to take immediate action to block advertisements related to Havan that were not officially contracted by the retailer. Meta has been given 48 hours to comply with this directive. Failure to adhere to the court’s order could result in penalties reaching up to 20 million reais (approximately $3.62 million).

Judge Joana Ribeiro criticized Meta’s ad practices, describing them as insecure and problematic for sustaining the company’s business model. She emphasized that it is unacceptable for Meta to allow the sale of ads without adequate safeguards to ensure their authenticity.

In a statement issued on Monday, Havan hailed the court’s ruling as a significant step forward in safeguarding both the company’s and Hang’s rights. The retailer had accused Meta of profiting from these illicit ads without taking responsibility for their verification or authenticity, thereby leading to fraud victims wrongly attributing the scam to Havan.

Earlier this year, Reuters’ fact-checking service in Brazil uncovered three fraudulent advertisements on Meta platforms that misused Hang’s likeness. These ads, which exhibited signs of artificial intelligence being used to mimic Hang’s voice, tricked consumers into paying for non-existent products.

Meta has not yet commented on the ruling, but the company retains the option to appeal the decision. The case highlights ongoing concerns about the responsibility of social media platforms in monitoring and managing fraudulent advertising content.