Meta sued by California county over alleged scam ads<\/figcaption><\/figure>\n<\/div>\nRecently, Meta has been sued for online advertising scams.<\/p>\n
The news comes after Santa Clara County, California sued the Meta platform, alleging it profited from Facebook and Instagram ads promoting scams in violation of California’s false advertising and unfair business practices laws.<\/p>\n
The lawsuit, filed Monday in Santa Clara County Superior Court on behalf of all California residents, accuses the social media giant of tolerating fraudulent advertising on a global basis.<\/p>\n
The lawsuit seeks compensatory damages, civil damages and an injunction barring Meta from engaging in unfair business practices.<\/p>\n
Citing leaked internal documents first reported by Reuters last year, the complaint alleges the company made $7 billion in annual revenue from so-called \u201chigh-risk\u201d scam ads that showed clear signs of fraud.<\/p>\n
The county alleges that instead of taking sweeping action against fraudulent advertisers, Meta tolerated rampant misconduct and even installed “guardrails” to prevent efforts to curtail the scam if it cost the company too much money.<\/p>\n
Santa Clara further alleged that Meta contributed to the fraud epidemic by allowing middlemen to sell accounts to place ads that were protected from enforcement and by targeting scam ads at users who had clicked on similar fraudulent offers in the past.<\/p>\n
Citing the Reuters trial, the county alleged that Meta’s generative artificial intelligence systems often assist unethical marketers in creating ads for scams.<\/p>\n
“The level of Meta’s misconduct has reached extraordinary levels and needs to stop,” county councilor Tony LoPresti told Reuters. \u201cAs civil prosecutors in Silicon Valley, we have a special duty to hold tech companies accountable to the law.\u201d<\/p>\n
The Meta company has rejected claims that it knowingly accepts advertising for scams to maintain its revenue flow.<\/p>\n
“We aggressively fight fraud and scams because people on our platform don’t want this content, legitimate advertisers don’t want it and we don’t want it either,” a Meta spokesperson told Reuters last year.<\/p>\n
In Santa Clara’s complaint, the county seizes on such assurances as a component of Metra’s alleged misconduct. <\/p>\n
By assuring users that anti-scam efforts are its top priority and that it rigorously reviews ads for violations of platform policies, the county says, Meta deceived the public and concealed the extent to which fraudulent ads boosted its profits.<\/p>\n
“Based on information and belief, Meta may also adjust the influx of scam ads on its platforms to smooth its earnings or achieve specific revenue targets,” Santa Clara’s filing said.<\/p>\n
To assist with the lawsuit against Meta, Santa Clara’s county attorney is working with three outside law firms\u2014Bernstein, Litowitz, Berger & Grossman; Ren\u00e9 Public Law Group and Bishop Partnoy.<\/p>\n
But the county will retain full control over decisions related to the case, LoPresti said, and the companies will be paid only if the county wins.<\/p>\n<\/p><\/div>\n