The complaint, filed on behalf of California residents, alleges that Meta makes up to $7 billion a year from “high-risk” fraudulent ads and tolerated the practice. The county wants restitution, civil damages and an injunction.
Santa Clara County has sued Meta Platforms in California state court, alleging that the company earnings from fraudulent advertising on Facebook and Instagram in violation of California’s false advertising and unfair trade practices laws.
The lawsuit, filed Monday in Santa Clara County Superior Court on behalf of all California residents, alleges that Meta earns up to $7 billion in annual revenue from ads that show clear signs of fraud.
The complaint says Meta “largely tolerated” the misconduct and set up internal barriers to block scam reduction efforts that cost the company too much money.
The county also alleges that Meta allowed middlemen to sell advertising accounts that were protected from law enforcement and that the company targeted fraudulent ads to users who had clicked on similar fraudulent listings before.
The complaint is based on internal documents first reported by Reuters in November 2025, which indicated that Meta’s own projections expected more than 10% of its 2024 annual revenue, approximately $16 billion, to come from advertising scams and prohibited products.
Previous private litigation of the Consumer Federation of America cited the same set of documents.
The lawsuit seeks restitution for affected California residents, civil damages and an order prohibiting Meta from continuing the alleged practices.
Meta did not immediately respond to a request for comment. The company has previously said that it removes fraudulent content and has dedicated teams working to enforce its policies.
In April he filed his own lawsuits against advertisers involved in celebrity impersonation scams.
Santa Clara County’s complaint is the latest in a multi-pronged legal challenge over Meta’s advertising platform.
A class action lawsuit filed in Washington, DC by the Consumer Federation of America covers similar ground. Japanese regulators, the UK’s Online Safety Act enforcement team and the Australian Competition and Consumer Commission have opened parallel investigations into fraudulent advertising practices on the company’s platforms in the past twelve months.
The Santa Clara case is being handled by the county attorney’s office and a The scheduling order is expected within thirty days.
