Facebook takes legal action against Chinese individuals, company for ad fraud

Facebook takes legal action against Chinese individuals, company for ad fraud
© Getty Images

Facebook filed suit on Thursday against two Chinese individuals and one company for tricking internet users into downloading malware that enabled them to run deceptive ads on Facebook.

Facebook alleged in the suit filed in the U.S. District Court of the Northern District of California that between 2016 and August of this year, Hong Kong-based ILikeAd Media International Company Ltd., along with Chinese software developer Chen Xiao Cong and Chinese marketing director Huang Tao, tricked internet users into downloading malicious software.

ADVERTISEMENT

According to the suit, this software then allowed the defendants to access the victims’ Facebook accounts and to takeover their ad accounts to run malicious ads on Facebook without the victims’ consent or knowledge.

The defendants used a practice known as “cloaking” to enable the malicious ads to slip past Facebook’s review, with the defendants showing Facebook a different landing page clicking on the ad would lead to as opposed to the landing page the victims would see.

Facebook is seeking “injunctive relief” to stop the defendants from “misusing” Facebook in this way, and to obtain damages.

In an online post about the case on Thursday, Jessica Romero, Facebook’s director of Platform Enforcement and Litigation, and Rob Leathern, director of Product Management and Business Integrity at Facebook, wrote that the company had worked with victims of the malware scheme to secure their accounts, and had refunded them money used to run the malicious ads.

“To protect Facebook users and disrupt these types of schemes, we will continue our work to detect malicious behavior directed towards our platform and enforce against violations of our Terms and Policies,” Romero and Leathern wrote.

According to the case file, Facebook has “notified hundreds of thousands of users that their accounts may have been compromised” since April, and required these users to change their passwords and verify their identities as a result. 

Romero and Leathern wrote that the types of ads run included those promoting diet pills and counterfeit goods, and the defendants at times used photos of celebrities in the ads to further encourage Facebook users to click on them. 

They noted that “there have not been many legal actions of this kind” due to difficulty in identifying the groups and individuals behind cloaking cases.

“Creating real world consequences for those who deceive users and engage in cloaking schemes is important in maintaining the integrity of our platform,” Romero and Leathern wrote.