The attorney general of the U.S. Virgin Islands has sued Meta Platforms, accusing the Facebook and Instagram owner of knowingly profiting from scam advertisements and failing to keep its platforms safe for children.
The lawsuit, filed in the Superior Court of the Virgin Islands on St. Croix, cites a recent Reuters investigation and alleges Meta projected that about 10% of its 2024 revenue—roughly $16 billion—would come from ads linked to scams, illegal gambling, and banned products, while misleading the public about its safety efforts.
“Meta knowingly and intentionally exposes its users to fraud and harm. It does so to maximize user engagement and, in turn, its revenue,” the lawsuit states.
The complaint repeatedly references a Reuters report published last month that drew on internal company documents showing Meta’s own estimates of revenue tied to problematic advertising.
According to the report, Meta does not block advertisers suspected of scams unless its algorithms are 95% certain the marketer is engaging in misconduct.
The lawsuit seeks penalties under the Virgin Islands’ consumer protection laws. Attorney General Gordon C. Rhea said the action “marks the first effort by an attorney general to address reports of rampant fraud and scams on Meta’s platforms.”
The filing also accuses Meta of misleading users, parents, regulators, and lawmakers about the effectiveness of its safety policies. “Meta repeatedly touts the ‘safety’ of its platforms,” the lawsuit states, adding that the company “consistently, and intentionally, fails to implement the policies it writes.”
The allegations have drawn broader regulatory attention. Following the Reuters investigation, two U.S. senators urged the Securities and Exchange Commission and the Federal Trade Commission to examine the matter and “pursue vigorous enforcement action where appropriate.”
Meta has pushed back strongly. Spokesman Andy Stone referred Reuters to previous company statements rejecting claims that the company has failed to protect consumers.
“We aggressively fight fraud and scams because people on our platforms don’t want this content, legitimate advertisers don’t want it and we don’t want it either,” Stone said, adding that reports of scams from users have fallen by half over the last 18 months.
He also dismissed allegations related to child safety, saying they were “without merit.” “We strongly disagree with these allegations and are confident the evidence will show our longstanding commitment to supporting young people,” Stone said.
The lawsuit comes amid ongoing scrutiny of Meta’s safety practices. In August, Reuters reported that an internal Meta document on chatbot behavior permitted artificial intelligence creations to “engage a child in conversations that are romantic or sensual.”
Meta said it subsequently removed portions of the guidelines that allowed chatbots to flirt or engage in romantic roleplay with minors.
