Meta faces $3.6 million fine in Brazil for allowing bogus Havan ads

By Victor Pinheiro

SÃO PAULO - Meta Platforms faces a fine of up to $3.62 million after losing a lawsuit by Brazilian department store chain Havan that accused the social media company of accepting paid advertisements that fraudulently use the retailer's name to deceive consumers.

A Santa Catarina state judge ruled on Monday that Meta had 48 hours to block ads that Havan did not contract and which mention it or its owner, billionaire Luciano Hang. If Meta does not comply, fines can go up to 20 million reais.

In her ruling, Judge Joana Ribeiro said it was unacceptable for Meta to sell ads in an insecure way to sustain its business model.

In a statement on Monday, Havan called the decision "a landmark" in protecting the company's and Hang's rights.

Meta declined to comment. The company can appeal the decision.

In the lawsuit, Havan said Meta profits from illicit ads without taking responsibility or verifying their legitimacy, leading fraud victims to sue the retailer.

Earlier this year, Reuters' fact-checking service in Brazil verified three false Havan ads on Meta platforms that used Hang's image. All showed signs of artificial intelligence being used to imitate the businessman's voice.

The fraudulent ads led victims to pay for nonexistent products.

($1 = 5.5209 reais)

(Writing by Bernardo Barbosa; Editing by Richard Chang)