EDITORIAL | With Rampant SNS Fraud, Japanese Gov't Must Regulate Meta

Is this how the public perceives the internet platform company sweeping the world? Social networking site, or SNS fraud caused by fake accounts and advertisements impersonating celebrities is hurting more and more people. Yet the SNS operator posting these problematic advertisements, namely US-based Meta (formerly Facebook), apparently cannot clean up the problem itself.

To protect Japanese citizens from damage caused by financial scams, the government of Japan must resolutely respond to this pressing issue. That includes new regulations.

According to the National Police Agency, investment fraud perpetrated through SNS sites has soared since the summer of 2023. Damage in 2023 was estimated to have reached around ¥27.8 billion JPY ($178 million USD). Facebook was the site scamming men the most, while Instagram scammed more women.

Often users were fooled by celebrity impersonations into clicking on an advertisement. And, after being induced to register as a friend on LINE, they were defrauded under the pretext of trading in cryptocurrency assets. Or they were lured into some other form of investment.

*Takuya Hirai, head of the Digital Society Promotion Headquarters, speaks at an LDP meeting on fraudulent advertisements on SNS, on April 19. (@Kyodo)*

Prominent Entrepreneurs' Names Used in Fraud

For example, such advertisements featured noted financial analyst Takuro Morinaga and prominent entrepreneurs Yusaku Maezawa and Takafumi Horie. These seductive ads all appeared to be unauthorized and posted for fraudulent purposes.

In fact, recently Maezawa and Horie personally appealed for stricter regulations before a Liberal Democratic Party (LDP) subcommittee meeting. According to Maezawa, there had been 188 cases of impersonating him, causing damages reaching around ¥2 billion ($12.83 million). He said that, although he asked Meta to take down these misleading ads, the company did not respond. Furthermore, the number of ads using his name was actually increasing.

Although Meta eventually released a statement, it was disappointing in that it only looked at the issue from the standpoint of corporate profits. It complained that it would be difficult to screen the many ads it carried. It also sought to shift responsibility by contending, "Countermeasures against fraud require a society-wide approach."

The internet giant tried to further limit its responsibility by saying, "It (Meta) would play a role" in such an effort.

Businessman Yusaku Maezawa speaks to reporters about his intention to sue US company Meta, which operates Facebook and Instagram, over the rampant use of investment fraud advertisements impersonating himself on social media. April 10, at LDP Headquarters (@Sankei by Shimpei Okuhara)

Following Rules in Public Space

SNS platforms are by their very nature public infrastructure. If individuals have been hurt by what is posted, it is only natural to prioritize relief, even if that means that certain services are suspended.

Meta claims the inability to police what it allows to be posted. Nevertheless, four victims in Kobe and others in foreign countries have filed lawsuits seeking compensation for the harm such false ads have caused. The number of such lawsuits will certainly rise in the days to come. Having become a victim of identity theft, Maezawa too has indicated his intention to sue.

It is clear that if Meta were to purge the fraudulent ads, the damage would immediately cease, but Meta refuses to move. If that is all it can do, the Japanese government must take action.

Is Meta Innocent?

Furthermore, the government should question whether or not Meta is actually aiding and abetting the commission of fraud.

Prime Minister Fumio Kishida has announced the government's aim to formulate comprehensive measures for dealing with the problem by June. But that would be too late. The National Police Agency and the Ministry of Internal Affairs and Communications should take the lead in adopting measures as soon as possible.

Part of the reason for fraud-induced losses is the promotion of a shift "from savings to investment." That is because the procedures for purchasing financial products are now commonly completed entirely online. For that reason, the financial authorities as well should propose countermeasures.

Meanwhile, fake information using audio, video, and other means created through generative AI is becoming more sophisticated. That is the trend of our times and will only increase the threat of fraud. The government should not shy away from appropriate regulation.

Author: Editorial Board, The Sankei Shimbun