Santa Clara County, in California’s Silicon Valley, has sued Facebook parent Meta Platform alleging it knowingly profited from scam advertisements in violation of the state’s laws governing false advertising and unfair business practices.
The lawsuit, filed on Monday in Santa Clara County Superior Court on behalf of all California residents, comes after a Reuters report last year cited leaked internal Meta documents estimating the company earned up to $7 billion (£5.2bn) in annual revenue from “high-risk” scam ads, meaning that they show clear signs of being fraudulent.
Santa Clara County’s lawsuit cites these documents, and alleges that Meta largely tolerated the fraudulent ads, and went so far as to establish “guardrails” to halt scam reduction efforts if they had too much of an impact on the company’s bottom line.
Revenues
The lawsuit argues Meta materially contributed to large-scale fraud by allowing intermediaries to place ads that were protected against anti-scam action, and by targeting scam ads at people who had clicked on ads of the same kind in the past.
