Meta, the operator of Facebook and Instagram, has been sued by a local government in Silicon Valley, USA, on suspicion of neglecting fraudulent advertisements.
Santa Clara County in California announced on the 11th (local time) that it filed a lawsuit in state court, stating that Meta is aware of billions of fraudulent advertisements occurring on its social network service (SNS) platform but is using them as a revenue-generating tool without blocking them.
The county argued in its complaint that Meta exposes users to approximately 15 billion fraudulent advertisements daily, including fraudulent financial products, fake cures for incurable diseases, ineffective nutritional supplements, and donation solicitations impersonating celebrities, and that it earns approximately $7 billion (10 trillion won) annually through them.
The county criticized Meta for identifying advertisers with high fraud potential and, instead of removing them, maximizing such revenue by charging them higher rates.
It further mentioned that Meta manages advertising revenue earned from advertisers with high fraud correlation separately under the name 'violation revenue,' and argued that Meta regards fines imposed by regulatory authorities as merely business operating costs.
In particular, the county criticized Meta, citing internal Meta documents, for establishing a 'revenue safeguard' that restricts the application of fraud prevention measures if they impact revenue beyond a certain level.
Meta's artificial intelligence (AI) tool 'Advantage+ Creative,' provided to advertisers, also came under scrutiny.
The county pointed out that fraudulent advertisers can transform fraudulent advertisements into 4,000 different versions with just a few clicks using this tool.
The county calculated that due to Meta's negligence regarding fraudulent advertisements, the damage suffered by California residents in 2024 exceeded $2.5 billion (approximately 3.7 trillion won), with damages to seniors aged 60 and older reaching $800 million.
The county requested that the court issue an injunction against Meta's such business practices, impose civil penalties, and recover unjust profits.
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YouTube probably isn't innocent either.
