Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) (No 2)
[2023] FCA 1234
•23 October 2023
FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) (No 2) [2023] FCA 1234
File number: NSD 188 of 2022 Judgment of: CHEESEMAN J Date of judgment: 23 October 2023 Catchwords: PRACTICE AND PROCEDURE – application for stay of proceedings – where criminal proceedings commenced in Magistrates Court of Western Australia in relation to overlapping factual matrix – where related criminal proceedings is a private prosecution – where the accused in the criminal proceeding is a corporation – where the applicants are regulators and there is a public interest in the civil proceeding – where the pleadings in the civil proceedings have not closed – where there was overlap in witnesses between the civil and criminal proceedings – whether the interests of justice require an immediate stay of the civil proceeding - Held: application dismissed. Legislation: Australian Crime Commission Act 2000 (Cth)
Australian Securities and Investments Commission Act 2001 (Cth) ss 12DA(1), 12DB(1)(b), (c), (d), (e), 12DF(1)
Competition and Consumer Act 2010 (Cth) s 155(7), (12) Sch 2 ss 18, 29(1)(d), (e), (f), (g), 34
Criminal Code 1995 (Cth)
Evidence Act 1995 (Cth) s 128
Federal Court of Australia Act 1976 (Cth) ss 23, 37AF, 37AJ, 37 M
Federal Court Rules 2011 (Cth) rr 2.32(1)(b), (3)(b)
Cases cited: 5 Boroughs NY Pty Ltd v State of Victoria (No.3) [2023] VSC 22
Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) [2022] FCA 1062
Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2019] FCA 964; 138 ACSR 42
Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541
Commissioner of the Australian Federal Police v Zhao [2015] HCA 4; 255 CLR 46
Construction, Forestry, Mining and Energy Union v Australian Competition and Consumer Commission [2016] FCAFC 97; 242 FCR 153
Impiombato v BHP Group Limited [2020] FCA 350; 143 ACSR 301
Lee v NSW Crime Commission [2013] HCA 39; 251 CLR 196
Lee v The Queen [2014] HCA 20; 253 CLR 455
McMahon v Gould (1982) 7 ACLR 202
Ortensio Lucciano (a pseudonym) v R [2021] VSCA 12; 287 A Crim R 529
Ransley v Commissioner of Taxation [2016] FCA 778
State of Victoria v 5 Boroughs NY Pty Ltd [2023] VSCA 101
Strickland v Director of Public Prosecutions (Commonwealth) [2018 HCA 53; 266 CLR 325
X7 v Australian Crime Commission [2013] HCA 29; 248 CLR 92
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Economic Regulator, Competition and Access Number of paragraphs: 118 Date of last submissions: 31 August 2023 Date of hearing: 7, 8 December 2022 Counsel for Applicants: Ms N Sharp SC with Ms C Winnett and Ms A Campbell Solicitor for Applicants: Johnson Winter & Slattery Counsel for Respondents: Dr K Stern SC with Ms F Roughley, Ms J Roy and Mr K Sharma (Mr N Owens SC – written submissions on 24 August 2023) Solicitor for Respondents: Corrs Chambers Westgarth
ORDERS
NSD 188 of 2022 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
First Applicant
RAMI GREISS, THE HOLDER OF A DELEGATION OF THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION DATED 25 FEBRUARY 2022 PURUANT TO SECTION 102 OF THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION ACT 2001 (CTH) IN RELATION TO ALLEGED CONTRVAENTIONS OF THAT ACT
Second Applicant
AND: META PLATFORMS, INC. (FORMERLY FACEBOOK, INC.)
First Respondent
META PLATFORMS IRELAND LIMITED (FORMERLY FACEBOOK IRELAND LIMITED)
Second Respondent
ORDER MADE BY:
CHEESEMAN J
DATE OF ORDER:
23 OCTOBER 2023
THE COURT ORDERS THAT:
1.The respondents’ application for a stay be dismissed.
2.Subject to further order, the reasons of the Court (save for paragraphs [1] to [7]) be suppressed on the Court file and not published to any person other than the parties and their legal representatives pending determination of the extant applications for confidentiality orders, any applications for confidentiality in respect of any part of the reasons, clarification of the applicants’ undertaking and costs.
3.Subject to further order, paragraphs [1] to [7] of the reasons be suppressed on the Court file and not be published other than to the parties and their legal representatives until 25 October 2023.
4.By 4pm, 24 October 2023, the parties are to inform the Associate to Cheeseman J whether any confidentiality application will be made in respect of paragraphs [1] to [7] of the reasons.
5.Until further order, any person who accesses the reasons pursuant to Order 2 on behalf of the applicants, including any legal representative of the applicants, must not communicate, directly or through another person, with Dr Andrew Forrest AO or his legal representatives or any witness, lay or expert, involved in proceeding AM/663/2022 in the Magistrates Court of Western Australia.
6.The proceeding be listed for case management to address the issues identified in Order 2 at 9.30am on 26 October 2023.
7.The parties have liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
CHEESEMAN J:
INTRODUCTION
These reasons relate to an interlocutory application brought by the respondents, Meta Platforms, Inc. (formerly, Facebook Inc.) and Meta Platforms Ireland Limited (formerly, Facebook Ireland Limited), (together, Meta), to proceedings commenced by the Australian Competition and Consumer Commission (ACCC) and Rami Greiss, a delegate from the Australian Securities and Investments Commission (ASIC) (together, the Commission).
The central allegation of fact in the substantive proceeding is that since at least October 2017, Meta has, as a consequence of an advertising process with an automated self-service function, displayed advertisements on the Facebook platform targeted to Australian users featuring various public figures purportedly endorsing different investment schemes, typically involving trading in cryptocurrency (Celebrity Fake Endorsement Ads). The Celebrity Fake Endorsement Ads link to a landing page featuring a purported media article which includes references to a purported interview with the particular public figure who is said to use and/or endorse a cryptocurrency trading scheme utilising a particular trading platform. The landing page invites the user to sign up to that same trading scheme.
The Commission commenced the substantive proceedings against Meta on 18 March 2022, alleging contraventions of various provisions of the Australian Consumer Law (ACL), being Sch 2 to the Competition and Consumer Act 2010 (Cth) (CCA) and, or alternatively, various provisions of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act). The provisions of the ACL that are alleged to have been contravened are ss 18, 29(1)(d), (e), (f) and (g), and 34. The provisions of the ASIC Act that are alleged to have been contravened are: ss 12DA(1), 12DB(1)(b), (c), (d) and (e), and 12DF(1). The Commission claims declaratory relief, pecuniary penalties, injunctive relief, an order for a compliance program, an adverse publicity order or an order for corrective advertising, and costs. The declaratory relief sought relates to conduct which is alleged to have occurred from October 2017.
The interlocutory application is for the proceedings to be stayed pending the final determination or disposal of the criminal proceeding commenced by Dr Andrew Forrest AO in the Magistrates Court of Western Australia against Meta Platforms or until further order of the Court. The Commission opposes the grant of a stay, submitting in essence that the application is premature at this stage and that other steps are available to mitigate any prejudice to Meta in the criminal proceeding.
Meta also seek various non-publication and non-access orders in relation to the Statement of Claim filed on 4 August 2022 (SOC), pending the final determination or disposal of the criminal proceeding. Meta relies on ss 37AF and 37AJ of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and rr 2.32(1)(b) and 2.32(3) of the Federal Court Rules 2011 (Cth). That application will be determined at the same time as the parties’ address on whether any part of these reasons should be temporarily suppressed while the criminal proceeding is pending, there being substantial overlap in the likely subject matter of the applications.
An earlier application for confidentiality and non-publication orders sought by Meta was decided in Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) [2022] FCA 1062 (ACCC v Meta (No 1)). Familiarity with the reasons in ACCC v Meta (No 1) is assumed for the purpose of these reasons.
For the reasons that follow, Meta’s application should be dismissed. The application is premature and fails to adequately allow for the protective mechanisms available to the Court to manage the competing prejudices in issue in relation to the two proceedings at this stage. I am not persuaded that the interests of justice require an immediate stay of all interlocutory steps. Active case management with an eye to ameliorating the risks identified by Meta on this application during the pendency of the criminal trial will enable the civil proceeding to continue to progress at this stage. In my view, this approach will serve the interests of justice by balancing the prejudice to the Commission that would otherwise be occasioned if there was an immediate stay of this proceeding, against the potential risk to Meta Platforms if protective orders are not in place in the civil proceeding to guard against prejudicing of Meta Platforms in its defence of the criminal proceeding.
Paragraphs [8] to [117] have been temporarily redacted due to confidentiality claims. When these claims have been resolved, a publicly accessible fuller version of these reasons will be published.
CONCLUSION
For these reasons, the application to stay the proceeding must be dismissed. It will be necessary to hear from the parties in respect of the extant issues relating to confidentiality, any issues of confidentiality arising in respect of these reasons, clarification of the applicants’ undertaking and as to costs. I will make mechanical orders to facilitate this occurring.
I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman. Associate:
Dated: 23 October 2023
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