Facebook Sues LeadCloak for Running Deceptive Ads and Fake News on Covid-19

The suit, filed in federal court in California, alleges that Basant Gajjar's company LeadCloak provided ad-cloaking software designed to sneak fake news and scams related to COVID-19, cryptocurrency, diet pills and more past Facebook and Instagram's automated advertising review process. Using the name "LeadCloak," Gajjar, said to be based in Thailand, violated Facebook Terms and Policies by providing cloaking software and services designed to circumvent automated ad review systems, and ultimately run deceptive ads on Facebook and Instagram, Jessica Romero, Director of Platform Enforcement and Litigation at Facebook said in a statement.

LeadCloak's software also targeted a number of other technology companies including Google, Oath, WordPress, Shopify, and others, Romero said.

Cloaking is a malicious technique that impairs ad review systems by concealing the nature of the website linked to an ad. When ads are cloaked, a company's advertisement review system may see a website showing an innocuous product such as a sweater, but a user will see a different website, promoting deceptive products and services which, in many cases, are not allowed.

In this case, Leadcloak's software was used to conceal websites featuring scams related to global health crisis COVID-19, cryptocurrency, pharmaceuticals, diet pills, and fake news pages. Some of these cloaked websites also included images of celebrities, the social media giant said in the statement.

In addition to the filing, Facebook has taken technical enforcement measures against Leadcloak and accounts that the company has determined have used their software, including disabling personal and ad accounts on Facebook and Instagram. This suit will also further our efforts to identify Leadcloak's customers and take additional enforcement actions against them, the statement added.