A lawsuit filed by the attorney general of the U.S. Virgin Islands accuses Meta Platforms of knowingly allowing fraud and harmful content to flourish on Facebook and Instagram, arguing that the company’s public assurances of safety masked practices that prioritized engagement and advertising revenue.
A Lawsuit Rooted in Advertising and Harm
The attorney general of the U.S. Virgin Islands has sued Meta Platforms, accusing the social media company of deliberately profiting from advertisements linked to scams, illegal gambling and banned products, while failing to keep its platforms safe for children and adults alike.
Filed in the Superior Court of the Virgin Islands on St. Croix, the lawsuit alleges that Meta “knowingly and intentionally exposes its users to fraud and harm” in order to maximize user engagement and, in turn, its revenue. The case seeks civil penalties under the territory’s consumer protection laws and frames itself as a first-of-its-kind effort by a state or territorial attorney general to directly confront what it describes as rampant fraud across Meta’s platforms.
In a statement accompanying the filing, Attorney General Gordon C. Rhea said the lawsuit aims to address long-standing reports that scams and deceptive advertising have become entrenched features of Meta’s business model.
Internal Projections and Algorithmic Thresholds
The complaint repeatedly cites recent reporting by Reuters, which detailed internal Meta documents projecting that roughly 10 percent of the company’s 2024 revenue about $16 billion would come from advertisements tied to scams, illegal gambling and prohibited products.
According to that reporting, based on a cache of internal documents, Meta does not automatically block advertisers suspected of running scams unless its algorithms are at least 95 percent certain that the marketer is engaged in misconduct. The lawsuit argues that this threshold reflects a business calculation that tolerates significant levels of harmful advertising in exchange for continued revenue.
The filing also points to an internal Meta document, reported earlier by Reuters, that outlined chatbot behavior policies allowing the company’s artificial intelligence products to engage children in conversations described as romantic or sensual — a detail the lawsuit uses to challenge Meta’s public claims about child safety safeguards.
Safety Claims Versus Implementation
“Meta repeatedly touts the ‘safety’ of its platforms to its users, parents, regulators, and Congress,” the lawsuit states, adding that the company “consistently, and intentionally, fails to implement the policies it writes.”
Meta has rejected those allegations. In response to the lawsuit, company spokesman Andy Stone referred Reuters to prior Meta statements calling claims that it failed to protect consumers baseless. Stone said the company strongly disagrees with the allegations and is confident that evidence will show its long-standing commitment to supporting young people.
Stone also said Meta aggressively fights fraud and scams because users and legitimate advertisers do not want such content, adding that scam reports from users have fallen by half over the past 18 months.
Federal Scrutiny and Broader Implications
Following the Reuters reporting cited in the lawsuit, two U.S. senators urged the Securities and Exchange Commission and the Federal Trade Commission to examine the matter and pursue enforcement action where appropriate.
The lawsuit further accuses Meta of misleading the public about its efforts to protect both children and adults on platforms including Facebook and Instagram. By grounding its claims in internal documents and prior investigative reporting, the Virgin Islands case places renewed scrutiny on the tension between Meta’s public safety assurances and the internal metrics that govern advertising enforcement.
