Rhode Island Attorney General Peter Neronha has sued Meta Platforms, alleging the company profited from and helped create billions of dollars in scam advertising on Facebook, Instagram and WhatsApp while telling users it was protecting them, Reuters reported Monday. The case puts generative AI advertising tools at the center of a fraud claim, a theory that could reach any company offering automated ad creation.
What Happened
The suit was filed last week in Providence Superior Court, according to Reuters, which reported that it is the first scam-related case brought against Meta by a U.S. state. Santa Clara County in California filed a similar suit in May. The allegations here are as Reuters described them.
The state alleges that in many cases Meta's AI ad-creation tools "actively assisted" scammers with their marketing, and that the company helped create and optimize fraudulent ads. It also alleges Meta sometimes charged suspected fraudsters higher prices instead of blocking them.
Rhode Island cites earlier Reuters reporting on internal Meta documents, which said the company showed users about 15 billion higher-risk scam ads a day and earned roughly 10% of its 2024 revenue from fraudulent and banned advertising. Examples in the suit include ads in which scammers used the name and image of a senior Bank of America executive to lure users into fake stock trades on WhatsApp, and ads for AI deepfake pornography apps.
The state seeks civil penalties for each violation of state law, restitution for consumers, disgorgement of profits and a court order requiring Meta to address scam ads it creates and delivers. No total dollar amount was reported.
Meta's Response
Meta said it will fight the suit and called it unfounded, Reuters reported. The company said it removed more than 159 million scam ads in the past year and works with law enforcement against scam networks. Spokesperson Andy Stone criticized the attorney general for hiring an out-of-state private law firm instead of engaging with the company. Meta has also disputed Reuters' earlier reporting.
Why It Matters
Platforms have long argued they are not responsible for what advertisers post. Rhode Island's claim goes further: that Meta's own AI tools helped make the fraudulent ads. If a court accepts that framing, companies that sell AI content generation to advertisers could face questions about what their tools produce and who uses them.
The suit came a day after a New Mexico judge ordered Meta to pay that state $25 billion in a privacy case, which The Primary Wire reported, citing AFP. In August, Meta agreed to pay up to $18 billion to settle claims by nearly all U.S. states that it designed its platforms to addict children, Reuters reported.
What to Watch
- Meta's formal response in Providence Superior Court.
- Whether other states bring scam-ad cases built on the same AI-tools theory.
- Whether the complaint's evidence on Meta's AI ad tools becomes public as the case proceeds.
