Santa Clara County sues Meta over alleged scam ad revenue
Legal action alleges Meta generates $7bn annually from fraudulent ads by charging fees to suspected scammers below a 95% certainty threshold.
Santa Clara County has filed a lawsuit against Meta Platforms, alleging the technology conglomerate knowingly profits from scam advertising that generates approximately $7bn in annual revenue. The complaint, lodged on behalf of all California residents, argues that the company facilitates and monetises deception by flagging suspected offenders rather than blocking them, subsequently charging them fees to continue running advertisements.
The suit cites $2.5bn in losses reported by Californians in 2024, with senior citizens identified as being disproportionately affected. Santa Clara County Counsel Tony LoPresti described the company’s leadership as engaging in a “worldwide scheme to deceive consumers,” asserting that civil prosecutors in Silicon Valley cannot allow a powerful tech firm to perpetrate such practices. The complaint details specific scam types, including fraudulent financial products, cryptocurrency schemes, purported cures for incurable diseases, ineffective nutritional supplements, and impersonations of celebrities.
According to internal documents cited in the filing, Meta only banned marketers it was 95 percent certain were committing fraud. A 2025 investigation by Reuters noted that suspected scammers falling below this certainty threshold were charged a premium fee to continue their campaigns. The lawsuit further alleges that Meta’s sophisticated artificial intelligence and programme tools actively target “vulnerable consumers” through these mechanisms.
Meta has rejected the allegations. Spokesperson Andy Stone stated that the lawsuit “distorts our motives and ignores the full range of actions we take to combat scams every day.” The company maintains that it aggressively fights fraud and removed 159 million scam advertisements last year, noting that such activities are detrimental to users and businesses that rely on its services.
This legal action follows a landmark ruling in March where a California jury found that Meta and YouTube had deployed features that were addictive and harmed the mental health of a young litigant. While the damages awarded were modest, the ruling is viewed as a significant shift in liability for social media platforms. Additionally, the Consumer Federation of America recently filed a separate lawsuit in Washington, DC, claiming Meta prioritises profits over user protection.
