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Santa Clara County in California has filed a lawsuit against Meta Platforms, the parent company of Facebook and Instagram, alleging the tech giant knowingly profits from fraudulent advertising. The suit, filed Monday in Santa Clara County Superior Court, accuses Meta of violating California's false advertising and unfair business practices laws by tolerating scam ads on a global scale. The complaint seeks restitution, civil damages, and a court order barring Meta from continuing its alleged unfair practices.

Coverage comparison

Two major outlets—Al Jazeera and The Guardian—covered the lawsuit in detail. Both report that Santa Clara County filed the suit against Meta, but they emphasize slightly different aspects. Al Jazeera focuses on the broader context of Meta's legal troubles, including a recent jury verdict in Texas over child safety. The Guardian highlights internal documents and Meta's alleged 'guardrails' to protect profits. Both outlets quote Meta's spokesperson, Andy Stone, who said the company plans to defend itself, with The Guardian including an extended statement in which Stone said the lawsuit relies on reporting that 'distorts our motives.'

Key claims

The lawsuit, as reported by The Guardian, alleges that Meta earned up to $7bn in annual revenue from 'high-risk' scam ads—advertisements that show clear signs of being fraudulent. This figure was first reported by Reuters last year, based on leaked internal documents, and is repeated in the complaint.

According to Al Jazeera, the suit claims Meta's moderation system does not block suspected scam ads outright. Instead, it flags likely offenders and only bans marketers that Meta is 95% confident are committing fraud. Scammers below that threshold, Al Jazeera reports, are allowed to continue running ads if they pay a premium fee. This detail was originally reported by Reuters in a 2025 investigation.

Both outlets note that the types of scams alleged include fraudulent financial products, cryptocurrency schemes, purported cures for incurable diseases, ineffective nutritional supplements, and impersonations of celebrities soliciting donations. Meta's AI systems, according to the complaint, are said to assist unethical marketers in creating such ads—a claim that the Guardian reports as being based on Reuters testing.

The lawsuit further alleges that Meta actively targets 'vulnerable consumers' with its algorithms and that the company established 'guardrails' to block scam-reduction efforts when they might cost Meta too much money. This assertion, reported by the Guardian, is drawn from the leaked internal documents. It is a serious charge, though it has not been independently verified beyond the reporting of Reuters.

Al Jazeera adds that California residents reported $2.5bn in losses to scammers in 2024, a statistic that underscores the scale of the problem, though it is not clear if this figure is directly related to Meta's platforms.

Perspectives

Santa Clara County, represented by county counsel Tony LoPresti, argues that Meta's conduct has reached 'an extraordinary level' and must be stopped. LoPresti told Reuters, as quoted by the Guardian, that as civil prosecutors in Silicon Valley, they have a special duty to hold tech companies accountable.

Meta, through spokesperson Andy Stone, has rejected the allegations. In the Guardian's report, Stone denied that the company tolerates scams, saying they are 'not good for us or the people and businesses that rely on our services.' He suggested the lawsuit relies on reporting that misrepresents Meta's actions and fails to acknowledge the firm's ongoing efforts to combat fraud.

The lawsuit is part of a broader pattern of legal challenges against Meta, including a recent jury verdict in Texas that found the company liable for harm to young users. This case, filed on behalf of all California residents, seeks to hold Meta accountable under state consumer protection laws, which could set a precedent for other jurisdictions if successful.