Santa Clara County Sues Meta Over Alleged Scam Ad Profits

Santa Clara County has filed a civil lawsuit against Meta Platforms, alleging the company knowingly facilitated and profited from fraudulent advertisements on Facebook and Instagram, according to multiple reports Monday.

The Details

The complaint filed in Santa Clara County Superior Court on behalf of California residents alleges Meta violated California false advertising and unfair competition laws. The lawsuit seeks restitution, civil penalties, and injunctive relief.

According to NBC Bay Area and other outlets, the complaint says Meta may have earned about $7 billion annually from advertisements showing clear signs of fraud. The lawsuit draws on internal Meta documents previously reported by Reuters that allegedly described billions in revenue from high-risk ads and outlined internal guardrails that limited anti-scam enforcement when revenue was at risk.

County counsel Tony LoPresti said the alleged scam ads included fraudulent financial products, crypto schemes, bogus cures, ineffective supplements, and celebrity impersonation solicitations, according to Fortune and Bloomberg.

Meta, in a statement to NBC Bay Area, defended its ad enforcement practices. A Meta spokesperson said the claim relies on Reuters reporting that distorts its motives and said it removed more than 159 million scam ads last year.

"We aggressively fight scams on and off our platforms because they're not good for us or the people and businesses that rely on our services. We removed over 159 million scam ads last year alone," the spokesperson said.

Context

Meta's headquarters are in neighboring San Mateo County, while many of its employees live in Santa Clara County, according to Fortune and Bloomberg. The case therefore involves a local government taking action against a major technology company with deep regional ties.

The use of Reuters reporting on internal documents adds a newsroom-sourced dimension to the county's legal claims. According to Interesting Engineering, the documents allegedly outlined billions in revenue tied to high-risk ads and described internal guardrails that limited anti-scam enforcement when revenue was at risk.

Santa Clara County counsel Tony LoPresti, quoted in Interesting Engineering, said: "The scale of Meta's misconduct has reached an extraordinary level, and it needs to stop."

What's Next

The lawsuit seeks restitution, civil penalties, and injunctive relief under California false advertising and unfair competition laws. The case is filed in Santa Clara County Superior Court.

Meta has publicly contested the framing of the claims, attributing the lawsuit's premise to Reuters reporting it says distorts its motives.