Meta Faces Lawsuit Over Fraudulent Ads
Santa Clara County has filed a lawsuit against Meta, the parent company of Facebook, alleging that the tech giant has “knowingly” enabled and profited from billions of fraudulent advertisements.
The county uncovered internal documents showing that Meta generated $7 billion by displaying deceptive ads to users on its platforms, Facebook and Instagram, according to a report from Reuters.
The complaint highlights that more than 3.5 billion daily active users are exposed to over 15 billion fraudulent ads each day. The county noted that methamphetamine related activities accounted for a third of successful internet scams in the U.S.
County Attorney Tony Lopresti emphasized the importance of accountability, stating, “This case is about ensuring that big tech companies are not lawless as they break new ground in our society.” He expressed concern over the adequacy of Meta’s anti-fraud measures.
The complaint mentions that Meta has dismissed its entire anti-fraud team and reduced its efforts to combat fraud.
Lopresti pointed out a notable contradiction in Meta’s claims regarding its anti-fraud initiatives versus the reality presented in the allegations. He argued that the company appeared to accept fines for facilitating fraudulent activities since its revenue greatly overshadowed these fines.
The complaint further alleges that Meta allowed fraudulent ads to run if advertisers paid insurance premiums. The platform’s algorithms reportedly targeted those users most vulnerable to scams, including those who had interacted with similar deceptive ads in the past.
This lawsuit, filed in Santa Clara County Superior Court, is distinctive as it is the first of its kind initiated by a local prosecutor in the country and claims Meta’s practices violate California business law.
In response, Meta disputed the allegations, asserting that it actively combats fraud on its platform and beyond, claiming that fraud negatively impacts both the company and its users. They mentioned having removed over 159 million fraudulent ads last year alone and emphasized their partnerships with law enforcement to tackle these issues.
Meta has faced increasing legal scrutiny in recent years, particularly regarding child safety issues. Earlier this year, a jury in Los Angeles found both Google and Meta liable for contributing to social media addiction.
