Santa Clara County Sues Meta Over Scam Ads, Escalating Legal Pressure on Social Media Giant

A county in California has become the latest plaintiff in a lawsuit against Meta Platforms, the multinational corporation that operates Facebook, Instagram, WhatsApp, Messenger, and Threads. Filed earlier this week, the suit by Santa Clara County alleges Meta intentionally profits from scam advertisements, raking in $7 billion in yearly revenue.

This is the newest legal challenge in the U.S. targeting the business ethics of the social media company, following a landmark ruling in March when a jury found Meta liable for harming young users through deliberately addictive design features.

Meta, which surpassed $200 billion in revenue in 2025, is also facing a separate lawsuit from the American Consumer Federation, accusing its approach to scammers of violating consumer protection laws.

Lawsuit Details

According to Santa Clara County, the complaint accuses Meta of both "facilitating and monetizing" deception in its ad moderation practices. Internal Meta documents allegedly show that instead of blocking fraudulent ads, the company's system merely flags suspicious actors. Meta only bans marketers when it is 95% certain they are fraudulent. Those suspected of fraud below that threshold are charged higher fees to continue running ads, as detailed in a 2025 Reuters investigation.

The lawsuit contends that Meta's AI tools and sophisticated programs actively target "vulnerable consumers." Scams include "fraudulent financial products, cryptocurrency schemes, fake cures for incurable diseases, ineffective supplements, and celebrity impersonations soliciting donations."

"Behind every billion scam ads Meta runs daily, there are real people in danger. Often, the most vulnerable are hit the hardest," Santa Clara County Counsel Tony LoPresti stated. The county added that California residents reported over $2.5 billion in fraud losses in 2024, with seniors disproportionately affected.

Meta's Response

In a statement to Reuters earlier this week, Meta spokesperson Andy Stone called the lawsuit "a distortion of our motives and a disregard for all the measures we take to fight scams every day." Stone said: "We actively combat fraud on and off our platforms because it's bad for us and for the people and businesses who rely on our services." The company noted it removed 159 million fraudulent ads last year and cooperates with law enforcement.

Why Santa Clara County Sued

Santa Clara County is one of the wealthiest counties globally, home to most of Silicon Valley—the global tech hub and headquarters of numerous major companies. The lawsuit, filed on behalf of all California residents, states that Meta's "principal place of business is in California" and its leaders "regularly conduct business in California, particularly in Santa Clara County."

"As civil prosecutors in Silicon Valley, we cannot allow a powerful tech company like Meta to continue a global scheme to deceive consumers," County Counsel LoPresti emphasized.

Other Lawsuits Meta Has Faced

Meta and its subsidiaries have faced thousands of lawsuits since its founding in 2004, mostly involving moderation, privacy, and potential harm to children. However, a recent California ruling is seen as a potential turning point in how the company is held accountable.

In March, a California jury found Meta, along with YouTube, liable for implementing addictive features that harmed the mental health of a young plaintiff (20-year-old, pseudonym KGM). Although the company was ordered to pay only $4.2 million, the verdict signaled future legal challenges. Notably, the jury agreed that social media platforms can cause personal injury and must be held responsible.

That same month, a New Mexico jury found Meta violated state law for failing to protect children from predators. Last week, the American Consumer Federation, a nonprofit, filed a suit in Washington D.C., also accusing Meta of failing to protect users from scams, prioritizing profits over people. Meta has denied these allegations.