Santa Clara County in California, United States filed a lawsuit on Monday accusing Meta of knowingly profiting from scam-related advertisements on Facebook and Instagram.

The suit claims these practices breach California’s false advertising laws, according to Reuters.

The case, brought on behalf of all California residents, seeks restitution, civil penalties, and a permanent injunction to stop Meta from continuing the alleged conduct.

According to a 2025 report citing leaked internal documents, Santa Clara County, California alleges that Meta Platforms generated nearly $7 billion annually from advertisements linked to scams.

The complaint says Meta used artificial intelligence tools and targeted advertising systems to direct fraudulent ads toward vulnerable users.

It further alleges that the company not only tolerated these ads but also created internal mechanisms that hindered scam reduction efforts, prioritizing revenue goals over user safety.

Meta, however, has previously rejected similar allegations, telling Reuters that it “aggressively fights fraud and scams” across its platforms to protect users.

A Meta spokesperson told CNET in an email that the company continues to actively combat scams and fraud across its platforms.

“This claim relies on Reuters reporting that distorts our motives and ignores the full range of actions we take to combat scams every day,” the spokesperson said. “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. We removed over 159 million scam ads last year alone, launched new tools to protect people, and partnered with law enforcement around the globe to disrupt these criminals. We will fight this lawsuit.”

Santa Clara County’s Counsel has hired three law firms, Bernstein Litowitz Berger & Grossmann, Renne Public Law Group, and Bishop Partnoy, for the lawsuit, although all final decision-making authority remains with the county.