By Jeff Horwitz<\/p>\n
May 11 (Reuters) – California’s Santa Clara County has sued Meta Platforms, alleging it has profited from Facebook and Instagram ads promoting scams in violation of California’s false advertising and unfair business \u200cpractices laws.<\/p>\n
The lawsuit \u2013 filed Monday in Santa Clara County Superior Court on behalf of all California residents \u2013 \u200caccuses the social media giant of tolerating fraudulent advertising on a global basis. The suit seeks restitution, civil damages and an order prohibiting \u200bMeta from engaging in unfair business practices.<\/p>\n
Citing leaked internal documents first reported by Reuters last year, the complaint alleges that the company earned as much as $7 billion in annual revenue from so-called “high-risk” scam ads which show clear signs of being fraudulent.<\/p>\n
Rather than undertaking a broad crackdown on fraudulent advertisers, the county alleges, Meta largely tolerated the misconduct and even established \u201cguardrails\u201d to block \u200cscam reduction efforts if they cost the \u2060company too much money.<\/p>\n
Santa Clara further alleges that Meta materially contributed to an epidemic of fraud by allowing middlemen to sell accounts to place ads that were protected against enforcement, \u2060and targeting scam ads at users who had clicked on similarly bogus offerings in the past. Citing Reuters\u2019 testing, the county alleged Meta’s generative artificial intelligence systems often assist unethical marketers in creating ads for scams.<\/p>\n
\u201cThe scale of Meta\u2019s misconduct has reached \u200ban \u200bextraordinary level, and it needs to stop,\u201d County Counsel Tony LoPresti \u200btold Reuters. \u201cAs civil prosecutors in Silicon Valley, we \u200chave a special duty to hold tech companies accountable to the law.\u201d<\/p>\n
Meta did not immediately respond to a request for comment. The company has rejected claims that it deliberately accepts advertising for scams to maintain its revenue stream.<\/p>\n
\u201cWe aggressively fight fraud and scams because people on our platforms don\u2019t want this content, legitimate advertisers don\u2019t want it and we don\u2019t want it either,\u201d a Meta spokesman told Reuters last year.<\/p>\n
In Santa Clara\u2019s complaint, the county seizes on such \u200creassurances as a component of Meta\u2019s alleged misconduct. By assuring users \u200bthat anti-scam efforts are its top priority and that it rigorously \u200breviews ads for violations of platform policies, the county \u200bsays, Meta deceived the public and hid the degree to which bogus ads have boosted \u200cits profits.<\/p>\n
\u201cOn information and belief, Meta can even \u200badjust the flood of scam \u200bads it allows on its platforms in order to smooth its earnings or hit specific revenue targets,\u201d Santa Clara\u2019s filing states.<\/p>\n
To assist in the suit against Meta, Santa Clara\u2019s County Counsel is working with three outside \u200blaw firms \u2013 Bernstein, Litowitz, Berger and \u200cGrossmann; Renne Public Law Group and Bishop Partnoy. But the county will retain full control over decisions \u200binvolving the case, LoPresti said, and the firms will only be paid if the county wins.<\/p>\n
(Reporting \u200bby Jeff Horwitz, Editing by Steve Stecklow and Edwina Gibbs)<\/p>\n","protected":false},"excerpt":{"rendered":"By Jeff Horwitz May 11 (Reuters) – California’s Santa Clara County has sued Meta Platforms, alleging it has…\n","protected":false},"author":2,"featured_media":310424,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8,53863,130270,65781,197,198,130271],"class_list":["post-310423","post","type-post","status-publish","format-standard","has-post-thumbnail","category-california","tag-california","tag-california-headlines","tag-california-news","tag-false-advertising","tag-instagram-ads","tag-meta-platforms","tag-santa-clara","tag-santa-clara-county","tag-unfair-business-practices"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/310423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=310423"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/310423\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/310424"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=310423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=310423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=310423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}