County in Silicon Valley files lawsuit against Meta, accusing the company of profiting billions from fraudulent advertisements.

Santa Clara County has initiated a lawsuit against Meta, the parent company of Facebook and Instagram, alleging that the tech giant facilitates and profits from scam advertisements at significant financial cost to California residents. Filed in the Santa Clara County Superior Court, the lawsuit claims that Meta has knowingly allowed deceptive ads to remain active on its platforms while simultaneously reaping high revenues from these fraudulent practices.

The legal action marks a notable confrontation between local government and a major tech corporation over accountability in online advertising, specifically concerning the roles that platforms like Facebook and Instagram play in perpetuating scams. County officials have described the lawsuit as a pioneering effort by a local civil prosecutor in the United States, aimed at holding Meta responsible for enabling widespread deception and unfair business practices.

The lawsuit accuses Meta of violating California’s false advertising and unfair competition laws. It seeks material restitution, civil penalties, and a court order obligating the company to modify its operational practices in order to better protect consumers. County Counsel Tony LoPresti emphasized the importance of accountability, arguing that the tech industry must operate within the bounds of the law.

According to county officials, internal documentation suggests that Meta’s platforms host approximately one-third of internet scams, which collectively contributed to roughly .5 billion in losses for California residents in 2024 alone. These fraudulent advertisements range from misleading financial schemes and fake cures to impersonated celebrities soliciting money and cryptocurrency scams.

A report referenced in the lawsuit, conducted by a credible news outlet, indicated that Meta displays around 15 billion high-risk scam ads daily, generating billion in annual revenue. LoPresti detailed how Meta allegedly enables some scam ads to remain visible, despite internal warnings that identify them as likely fraudulent, often at a premium price.

Meta, which is located in Menlo Park, California, has pushed back against these allegations, asserting that they misrepresent the company’s intentions and ignore its efforts to combat online fraud. A Meta spokesperson claimed the company actively works to eliminate scams, having removed over 159 million fraudulent advertisements the previous year and collaborated with law enforcement to disrupt criminal operations.

The lawsuit further alleges that internal structures within Meta prioritize revenue generation from potentially harmful advertisements over consumer safety. Reports highlight that many flagged scam ads continue to run, contributing to elevated costs for legitimate advertisers and prolonging consumers’ exposure to fraud.

Additionally, it has been alleged that Meta’s algorithms may amplify the exposure of fraudulent ads to individuals who have previously engaged with scam content, disproportionately affecting vulnerable communities, including older adults and people of color.

With the tech sector already under scrutiny, this lawsuit against Meta may not only reshape how online advertising is regulated but also raise questions regarding the ethical responsibilities of social media companies in safeguarding their users against fraud. As the case unfolds, it reflects growing concern over the implications of unchecked digital advertising practices in an increasingly online world.