Facebook and Google face legal action for allegedly coordinating their efforts to ban cryptocurrency advertising in 2018, as law firm JPB Liberty filed a class-action lawsuit against the media giants today. The lawsuit filed in the Federal Court in New South Wales (NSW), Australia, has garnered so far more than $600 million in claims and is expected to reach in excess of $300 billion.
The claimants represented by the law firm argue their businesses were negatively affected when the social media giants acted within weeks of each other, to include the ban in their terms and conditions. JPB Liberty CEO Andrew Hamilton outlined the media giants acted as a cartel in launching the cryptocurrency advertising ban, to eliminate competition from the blockchain sector. Their coordinated actions killed the initial coin offering (ICO) market and caused financial damage to the wider industry.
In September 2018 Google partially reversed the sweeping ban and allowed regulated exchanges to be able to buy advertising in the US and Japan, while Facebook softened a bit in 2019, having said that pre-approvals for blockchain technology-related ads which were part of the ban would no longer be required, yet keeping the requirement for cryptocurrency advertising to go through a review.
A Disguised Hit on Competition from Blockchain Social Media Networks
JPB Liberty’s Vice President of Technology & Public Affairs, Brian Bishko, goes even further with claims that social media giants have become too large and their existence has turned into a danger to the world.
Besides crushing the cryptocurrency industry, the 2018 ban on advertising essentially stifled growth in new social media networks which run on blockchain technology, such as Hive, which pays its content into its own cryptocurrency Hive (called back then Steem).
Such social media networks pose a threat to established giant media companies such as Facebook and Google, as they cannot impose censorship due to their decentralised nature, while by contrast, the big four (including Google-owned YouTube and Twitter) own all content once posted on their platforms and can delete at will.
The US law protects the social media as it deems them as platforms, not as publishers, essentially taking away any accountability from their actions which more and more resemble editorial decisions on what content they choose to host and whether to keep or delete accounts, and ban people and businesses.
The lawsuit was funded by institutional litigation funders, venture capital and other like-minded investors, and if successful, claimants will be entitled to 70% of any settlement or full value of the claim, while funders will keep 30% of it. The sign-up for the suit will remain open until August 21 and expectations are the total claim may increase up to 500 times the current $600 million one.