The US state is accusing Meta of unlawfully profiting from scam ads across its platforrms.
The US state of Rhode Island has filed a lawsuit against Meta for its alleged tolerance of widespread scam advertising across Facebook, Instagram and WhatsApp.
Rhode’s Island Attorney General Peter Neronha has accused Meta of unlawfully profiting from and participating in the creation of billions of dollars in scam ads.
The state has claimed Meta’s AI ad creation tools often actively assist fraudsters in their scam marketing. Instead of consistently blocking advertisers in automated detection systems when fraud is suspected, the company charges them an extra penalty for being high-risk, Rhode Island alleges.
Although this isn’t the first time Meta has been hit with legal trouble over scam ads on its platforms, Rhode Island is the first US state to file a lawsuit. It follows a similar lawsuit filed in May by California’s Santa Clara County against the social media giant.
Previously, Thailand’s Consumer Council has also sued Meta over its role in hosting fraudulent and scam ads on Facebook and Instagram.
Neronha said: “As alleged, Meta knowingly exposed vulnerable users to fraud and scams, and made enormous profits in doing so. When companies, big or small, take advantage of Rhode Island consumers, this office will do everything within our authority to hold them to account.”
Meta has confirmed it will fight the lawsuit, calling it “unfounded,” and added the company regularly partners with law enforcement to disrupt scam networks.
Andy Stone, a spokesperson for Meta, told Reuters: “The attorney general refused to engage with us on ways we protect Rhode Islanders from scams, and has instead hired an out-of-state private law firm to concoct a lawsuit that ignores the full range of actions we take to combat scams every day.”
Stone explained that Meta has removed over 159 million scam ads, as well as launching new anti-fraud tools in the last year.
However, last year leaked internal documents showed the platform made roughly $16bn from harmful content and scam ads – equivalent to roughly 10% of global ad revenue.
The case was filed a day after Meta received a $25bn fine from a New Mexico judge in the US over its handling of user data and its alleged role in the Cambridge Analytica scandal.
