County Sues Meta Over Scam Ads on Platforms

Santa Clara County sued Meta Platforms on May 11 in California state court, alleging the company knowingly profited from scam advertising on Facebook and Instagram while telling users and advertisers it was cracking down on fraud. The civil complaint was filed by the Office of the County Counsel on behalf of the People of the State of California and seeks civil penalties, restitution and injunctive relief. County officials said the case targets what they described as a large flow of fraudulent ads for bogus investments, fake merchandise and impersonation scams. Meta said it disputes the allegations and plans to defend itself. ### What exactly did Santa Clara County accuse Meta of doing? The 202-page complaint says Meta’s platforms became “venues-of-choice” for fraudulent advertisers and alleges the company facilitated scam ads by allowing them to be created, targeted and optimized through its ad systems. The filing accuses Meta of violating California’s false advertising and unfair competition laws and of making misleading public statements about how aggressively it policed scams. (counsel.santaclaracounty.gov) Santa Clara County Counsel Tony LoPresti said in a county statement that the case was brought to hold Meta accountable for “knowingly and actively exposing consumers” to scam ads. The county’s website says the suit was filed in Santa Clara County Superior Court and describes the action as a civil prosecution on behalf of California residents. (files.santaclaracounty.gov) ### What numbers in the complaint stand out? The county’s complaint alleges Meta internally estimated roughly $7 billion a year in “violating revenue,” a term it used for revenue tied to fraudulent or otherwise prohibited ads. County officials also said the filing cites internal records showing Meta tracked up to 15 billion scam ads shown to users each day across its platforms. (counsel.santaclaracounty.gov) Reuters reported that the lawsuit says those ads ran on Facebook and Instagram and that the county alleges Meta weighed anti-scam measures against the revenue it could lose from stricter enforcement. The complaint itself says Meta balanced prevention costs, including likely regulatory fines, against advertising revenue that could be reduced by stronger controls. (news.santaclaracounty.gov) ### Why is the county, not a federal regulator, bringing the case? Santa Clara County filed the case through its county counsel office, which said it acted on behalf of the People of the State of California under state consumer-protection laws. The county said local civil prosecutors could pursue relief for deceptive business practices that harmed residents, including restitution and penalties. (msn.com) KQED reported that county officials framed the suit as an effort to protect seniors, families and small businesses that they say were harmed by scam ads. The complaint also says legitimate advertisers paid more because fraudulent advertisers distorted the ad marketplace, an allegation echoed in local coverage. ### How did Meta respond? (counsel.santaclaracounty.gov) Meta told Reuters it would fight the lawsuit and said scam activity is an industry-wide issue in which fraudsters constantly adapt their tactics to evade detection. Local reports similarly quoted a Meta spokesperson disputing the claims and saying the company invests heavily in enforcement. The company has not conceded the county’s figures or legal claims in the materials reviewed here. (kqed.org) The allegations in the complaint have not been tested in court. ### What does the lawsuit ask the court to do next? The complaint asks the Santa Clara County Superior Court to order injunctive relief, restitution for consumers and businesses, disgorgement and civil penalties under California law. (msn.com) The county’s public case page says the filing and related materials are available through its website, while court records are searchable through the Superior Court’s case information portal. (files.santaclaracounty.gov) May 11 is the filing date listed by the county, and Meta’s next step is to respond in court under California civil procedure. Any hearing dates, motions or answers would appear through Santa Clara County Superior Court records as the case proceeds. (counsel.santaclaracounty.gov) (files.santaclaracounty.gov)