Santa Clara County has filed a lawsuit against Meta Platforms, accusing the company of profiting up to $7 billion annually from scam ads on Facebook and Instagram while tolerating and enabling deceptive advertising activities.
- Meta allegedly earns $7bn annually from scam ads.
- Lawsuit claims Meta tolerated fraud and blocked stricter enforcement.
- Seeking damages, restitution, and an injunction against Meta.
What happened
Santa Clara County filed a lawsuit in state court accusing Meta of profiting from scam advertisements on Facebook and Instagram. The complaint alleges that Meta generated as much as $7 billion annually from ads that exhibit clear signs of fraud, violating California’s false advertising and unfair business practices laws. It further asserts that Meta tolerated these scam ads and implemented internal guards to limit efforts that would have reduced fraudulent advertising due to high costs.
The lawsuit also highlights that Meta allowed intermediaries to sell ad accounts shielded from enforcement and targeted users who had previously interacted with deceptive ads. The case draws on internal Meta documents indicating a significant portion—over 10%—of Meta’s projected 2024 advertising revenue, roughly $16 billion, could come from scams and prohibited goods.
Why it matters
This lawsuit underscores ongoing concerns about Meta’s responsibility and accountability for the content it monetizes and distributes. Scam ads can cause widespread harm to consumers, leading to financial loss and eroded trust in online platforms. The legal challenge aims to address not only financial restitution for victims but also to push Meta toward stricter ad enforcement policies.
Meta’s approach to scam advertising has come under scrutiny globally with parallel investigations by regulatory bodies in the US, UK, Japan, and Australia. These coordinated actions point to a broader demand for transparency and improved safeguards in digital advertising ecosystems, especially on dominant social media platforms.
What to watch next
The Santa Clara County lawsuit is expected to move forward with a scheduling order anticipated within 30 days. Legal outcomes may include court-ordered restitution for affected users, civil damages, and injunctions that change Meta’s advertising practices. Meta has yet to publicly comment on this recent filing but has previously asserted it actively removes scam content and pursues enforcement against bad actors.
This case represents one front in a multi-jurisdictional challenge against Meta related to scam advertising. Observers will be watching how coordination between government agencies and private litigants shapes future platform accountability and user protection measures. Results may influence regulatory approaches worldwide and prompt other jurisdictions to pursue similar actions.