California county scam ad lawsuit adds to mounting Meta legal woes

A county in the US state of California has become the latest litigant against Meta Platforms, the sprawling multinational corporation that operates Facebook, Instagram, WhatsApp, Messenger and Threads.

The lawsuit filed earlier this week by Santa Clara County alleges that Meta knowingly profits from scam advertising, which it says generated $7bn in annual revenue.

It is the latest US lawsuit to challenge the social media company’s ethics, following a landmark ruling in March that found the company harmed young users with intentionally addictive design features.

Meta, which made more than $200bn in revenue in 2025, has also faced a separate lawsuit filed by the Consumer Federation of America, which said its approach towards scammers violates consumer protection laws.

What does the lawsuit allege?

The lawsuit alleges that Meta both “facilitates and monetises” deception in how it moderates its advertisements, according to Santa Clara County.

Far from scam advertisements being blocked, likely offenders are simply flagged by Meta’s system. Meta only banned marketers it was 95 percent certain were commiting fraud, according to Meta’s internal documents. Suspected scammers below that threshold are then charged a premium fee to continue running the advertisements, according to a 2025 investigation by the news agency Reuters.

The lawsuit says that Meta’s sophisticated artificial intelligence and programme tools actively target “vulnerable consumers”.

The scams include “fraudulent financial products, cryptocurrency schemes, purported cures for incurable diseases, ineffective nutritional supplements, and impersonations of celebrities asking for monetary contributions”.

“Behind every one of the billions of scam ads Meta runs each day, there are real people at risk. Too often, it’s the most vulnerable people who suffer the harshest impacts,” Santa Clara County Counsel Tony LoPresti said in a statement.

The county added that California residents reported more than $2.5bn in losses to scammers in 2024, with senior citizens hit disproportionately hard.

What has Meta said?

In a statement to Reuters earlier this week, Meta spokesperson Andy Stone said the lawsuit “distorts our motives and ignores the full range of actions we take to combat scams every day”.

“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,” Stone said.

The company has said it removed 159 million scam advertisements last year and has partnered with law enforcement agencies.

Why is Santa Clara launching the lawsuit?

Santa Clara County is one of the wealthiest in the world. It contains large portions of Silicon Valley, a global technology hub and home to several major companies.

The lawsuit is filed on behalf of all California residents, with the complaint stating that Meta’s “principal place of business is in California” and that the company’s leaders “regularly engage in business in California and, specifically, in Santa Clara County”.

“As civil prosecutors in Silicon Valley,” LoPresti said in a statement, “we cannot allow a tech company as powerful as Meta to continue perpetrating a worldwide scheme to deceive consumers.”

What other lawsuits has Meta recently faced?

Meta and the companies it owns have faced thousands of lawsuits since its founding in 2004, then named TheFacebook, Inc. The vast majority have related to its moderation practices, privacy, and potential harm to children.

But a recent California ruling against the company has been seen as a potentially landmark shift in how it is held liable.

A jury in California in March found that the company, alongside YouTube, had deployed features that were addictive and harmed the mental health of a young litigant, identified as 20-year-old KGM.

While the company was ordered to pay just $4.2m in damages, the ruling was largely seen as a bellwether for future and ongoing challenges. Notably, the jury sided with the argument that social media sites can cause personal injury and be held accountable for it.

Separately that month, a jury in New Mexico ruled that Meta had violated the state’s law by failing to protect children from predators.

Last week, the Consumer Federation of America, a nonprofit, filed a lawsuit in Washington, DC, also claiming that Meta has not lived up to its promises to protect against scammers, prioritising profits over users. Meta has also rejected the claims.