California county sues Meta over scam ads By Reuters

"The lawsuit - filed Monday in Santa Clara County Superior Court on behalf of all California residents - accuses the social media giant of tolerating fraudulent advertising on a global basis. The suit seeks restitution, civil damages and an order prohibiting Meta from engaging in unfair business practices. 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."

"Rather than undertaking a broad crackdown on fraudulent advertisers, the county alleges, Meta largely tolerated the misconduct and even established “guardrails” to block scam reduction efforts if they cost the company too much money. 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, and targeting scam ads at users who had clicked on similarly bogus offerings in the past."

"Citing Reuters' testing, the county alleged Meta's generative artificial intelligence systems often assist unethical marketers in creating ads for scams. “The scale of Meta's misconduct has reached an extraordinary level, and it needs to stop,” County Counsel Tony LoPresti told Reuters. “As civil prosecutors in Silicon Valley, we have a special duty to hold tech companies accountable to the law.”"

"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. “We aggressively fight fraud and scams because people on our platforms don't want this c"

Santa Clara County sued Meta Platforms in California, seeking restitution, civil damages, and an order stopping unfair business practices. The lawsuit alleges Meta profited from Facebook and Instagram advertisements promoting scams and tolerated fraudulent advertising on a global basis. The complaint cites leaked internal documents and claims Meta earned up to $7 billion annually from “high-risk” scam ads. The county alleges Meta used “guardrails” that limited scam reduction efforts when they threatened revenue. It also alleges Meta materially contributed to fraud by allowing middlemen to sell accounts protected against enforcement and by targeting users who previously clicked similar bogus offers. The complaint further alleges Meta’s generative AI systems often help unethical marketers create scam ads.

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