The U.S. Virgin Islands sues Meta (META.US), accusing it of deliberately profiting from fraudulent and harmful advertisements targeting children.

The Attorney General of the U.S. Virgin Islands has filed a lawsuit against Meta (META.US), accusing the owner of Facebook and Instagram of intentionally profiting from fraudulent advertisements and failing to safeguard its social media platforms for children. The lawsuit, filed in the Superior Court of St. Croix in the U.S. Virgin Islands, alleges that "Meta knowingly and intentionally placed its users at risk of fraud and harm. Its purpose was to maximize user engagement and increase company revenue." The lawsuit references a recent media report that revealed Meta's internal prediction that 10% (approximately $16 billion) of its 2024 revenue would come from fraudulent, illegal gambling, and banned product ads. The article, based on a batch of internal company documents, also disclosed that Meta would not ban suspected fraudulent advertisers unless its algorithm could be 95% certain of their violations. Following the publication of the report, two U.S. senators urged the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC) to investigate and take strong enforcement action when appropriate. The lawsuit in the Virgin Islands seeks penalties for violations of its consumer laws. Attorney General Gordon C. Riah stated in a release that this "marks the first time the Attorney General has attempted to address the rampant reports of fraud and scams on the Meta platform." The lawsuit also accuses Meta of misleading the public regarding its efforts to protect children and adults on its platform (including Facebook and Instagram). The complaint in the Virgin Islands states, "Meta has repeatedly touted the 'safety' of its platform to its users, parents, regulators, and Congress. But Meta consistently and intentionally failed to enforce its policies." In response to the lawsuit, Meta spokesperson Andy Stone stated that the accusations of failing to protect consumers are baseless. He said, "We actively combat fraud and scams because our platform users don't want to see this content, legitimate advertisers don't want to see it, and we don't want to see it either." He added that reports of scams from Meta platform users have halved in the past 18 months. Stone also argued that the accusations of Meta failing to provide a safe platform for young users are unfounded. He said, "We strongly oppose these accusations and believe the evidence will prove our long-standing commitment to supporting young people." In August of this year, media reports revealed that an internal document outlining Meta's behavior policy for chatting allowed its AI creation to "engage in romantic or sensual conversations with children." Meta's response to this report was that it had removed the portion of the guidelines that allowed the AI creation to flirt and engage in romantic role-playing with minors.