Santa Clara Sues Meta Over Scam Ads

Santa Clara County sued Meta Platforms in state court on May 11, accusing the company of knowingly profiting from scam advertising on Facebook and Instagram while telling the public it was aggressively policing fraud. The civil complaint was filed by County Counsel Tony LoPresti on behalf of the People of the State of California in Santa Clara County Superior Court. The county says Meta exposed users to a flood of fraudulent ads, derived billions of dollars in revenue from them and used tools that helped target vulnerable consumers. Meta said it would fight the case and said the claim mischaracterizes its anti-scam efforts. ### Why is Santa Clara County, not California’s attorney general, bringing this case? Tony LoPresti, Santa Clara County’s top civil lawyer, said the county filed the action as a local civil prosecutor under California’s false advertising and unfair competition laws. The county’s press release called it the first such case brought in California and the first by a local civil prosecutor anywhere in the United States against Meta over scam ads. (counsel.santaclaracounty.gov) Santa Clara County said it brought the complaint on behalf of all California residents, not only county residents. The filing names Meta Platforms and Instagram as defendants and alleges violations of California’s False Advertising Law and Unfair Competition Law. ### What does the complaint say Meta did? (news.santaclaracounty.gov) The 62-page complaint alleges Meta knew scam ads were widespread on its platforms and chose not to deploy or maintain stronger fraud controls when those measures threatened advertising revenue. The filing says Meta tracked scam ads internally, limited or dismantled prevention tools, failed to act on reports from users and regulators, and used its ad systems to help place and optimize fraudulent ads. (counsel.santaclaracounty.gov) Santa Clara County’s press release says Meta tracked up to 15 billion scam ads shown to users each day and referred internally to about $7 billion in annual “violating revenue,” which the county describes as revenue from fraudulent or otherwise prohibited ads. The county also alleges Meta’s own systems flagged likely scam ads and that scammers could be charged premium prices to run them. (files.santaclaracounty.gov) KQED reported that the complaint cites scams involving cryptocurrency, celebrity impersonation, military impersonation and supposed cures for incurable diseases. The county said seniors, families and small businesses were among those harmed. ### What is the county asking a judge to do? Santa Clara County said the lawsuit seeks an injunction against Meta’s alleged unlawful conduct, civil penalties and restitution for injured consumers. (news.santaclaracounty.gov) The county’s website says the action is meant to hold Meta accountable for exposing consumers to scam ads while publicly promising strong anti-scam enforcement. (kqed.org) NBC Bay Area reported that the complaint also seeks civil damages. Reuters, as cited by other outlets, reported the county wants a court order barring Meta from engaging in unfair business practices tied to scam advertising. ### How is Meta responding? Meta said the lawsuit relies on Reuters reporting that “distorts our motives and ignores the full range of actions we take to combat scams every day.” The company said scams are bad for Meta and for the people and businesses that use its services. (counsel.santaclaracounty.gov) Meta said it removed more than 159 million scam ads last year, launched new user-protection tools and worked with law enforcement around the world to disrupt scammers. (nbcbayarea.com) The company said it would fight the lawsuit. ### What happens next in court? The complaint was filed in Santa Clara County Superior Court on May 11, and the next formal step is Meta’s response in that case unless the court sets an earlier hearing. (nbcbayarea.com) The county has posted a public case explainer and the complaint on its website, where LoPresti and his office outline the allegations and requested remedies. (counsel.santaclaracounty.gov)