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In principle, a website or platform is not liable for 'fake' third-party advertisements, such as fraudulent crypto advertisements — provided that, as an intermediary, it had no knowledge of their unlawful nature. However, as soon as the platform knows or ought to know that an advertisement is a scam and fails to intervene, it can indeed be held liable.
The crypto sector and fraudulent advertisements
The crypto sector is growing rapidly, and crypto companies are spending large budgets on advertisements, banners, and sponsorship deals. Unfortunately, scammers also abuse these channels with fake advertisements, false tweets, and misleading advertorials. Victims then sometimes seek redress from the platform that displayed the advertisement.
The position of the platform
A platform that merely relays advertisements from others is, in principle, protected as an intermediary (comparable to Article 6:196c of the Dutch Civil Code): it is not liable for the content as long as it has no knowledge of its unlawful nature. That protection lapses as soon as the platform knows or ought to know that an advertisement is unmistakably unlawful and fails to intervene.
A duty of care in the case of clear signals
In the face of clear signs or reports of fraud, a platform must not look away. It must investigate and, if the unlawfulness is evident, remove or block the advertisement (notice-and-takedown). If it fails to do so, it may be held jointly liable for the damages.
What does this mean for you?
If you operate a platform with third-party advertisements, implement a reporting and monitoring process and intervene in cases of clear fraud. If you have been harmed by a fake advertisement, you should primarily address the advertiser, but under certain circumstances also the platform that failed to intervene despite knowing about it.
Frequently Asked Questions
Is a platform liable for fake advertisements?
In principle not, if it had no knowledge of the unlawful nature. However, it does if it knows or ought to know that an advertisement is a scam and fails to intervene.
Who do I contact as a victim?
In the first place, the advertiser, and under certain circumstances the platform that failed to intervene despite knowledge of the fraud.
What should a platform do regarding reports?
Investigate and, in case of evident unlawfulness, remove or block the advertisement (notice-and-takedown).
Assessing liability regarding advertisements?
Our legal experts advise platforms and aggrieved parties. View our contract lawteam, our legal assistance, or schedule a free consultation.
