Rhode Island has sued Meta Platforms, becoming the first U.S. state to accuse the company of knowingly profiting from fraudulent ads on Facebook, Instagram and WhatsApp. Attorney General Peter Neronha filed the suit, alleging Meta violated the state's Deceptive Trade Practices Act.
The complaint alleges Meta allows scam ads to spread and that its AI-powered tools have helped scammers optimize campaigns to target vulnerable users. It cites internal documents that it says suggest Meta earns billions from high-risk and fraudulent promotions.
A Meta spokesperson called the lawsuit unfounded, saying the company actively fights fraud and has removed millions of scam ads.
The lawsuit adds to Meta's regulatory challenges and scrutiny of its AI spending.