Rhode Island Sues Meta, Alleging It Profits From Scam Ads

The state of Rhode Island has sued Meta over scam ads. The complaint, filed by Attorney General Peter Neronha on October 22, alleges that the company earns money from these ads and has helped create some of them. At the heart of the dispute is whether Meta's own AI advertising tools effectively make the company a partner to scammers.

What happened?

The case is being heard in Providence County Superior Court. The state argues that Meta allowed scam ads on Facebook, Instagram and WhatsApp, profited from them, and violated the state's consumer protection law by telling users its platforms were safe. The details of the complaint and the damages sought have not yet been independently verified; Meta's response will also shape the course of the case.

Why does it matter?

This lawsuit is not a surprise in itself. For years, state attorneys general in the US have been suing Meta over child safety, addictive design and misleading statements. Rhode Island's move follows the same legal path: to get around Section 230, the federal shield that protects platforms from liability for content, it frames the issue not as content but as a commercial claim that misleads consumers. The allegation is that Meta says it is safe, while the product does something else.

The second layer is the structure of advertising revenue. Press reports based on internal documents have claimed that a considerable share of Meta's revenue comes from ads that carry a risk of fraud or involve prohibited products. We cannot assess the accuracy of those figures on our own, but if the claim is true, the incentive structure sits at the center of the problem. Rejecting an ad means losing revenue directly. Automated systems, for their part, shut down a suspicious account only above a certain confidence threshold; who sets that threshold, and with what revenue calculation, matters.

The third and newest dimension is artificial intelligence. Meta offers advertisers tools that generate copy, images and targeting suggestions. These tools boost efficiency for small businesses. But the same tool also means a scammer can produce a convincing fake investment ad in minutes, in multiple languages and variations. If a platform doesn't merely host an ad but also contributes to producing it, the "we are just an intermediary" defense weakens. How the court draws that distinction concerns the entire industry.

What changes for users in Turkey?

By an interesting coincidence, the week the lawsuit was filed, Meta launched a scam awareness campaign in Turkey with the Ministry of Interior and SİBERAY. Read side by side, the two stories make the contradiction concrete: the company tells users to "be careful" while, allegedly, running the ad system that feeds part of the problem. The awareness campaign is useful; educating users about fake crypto, fake investment advisers and fake ads featuring celebrities provides real protection. But shifting responsibility onto the user is not the same as stopping an ad from running in the first place.

Fake investment schemes and fake cargo-delivery message scams are common in Turkey, and there are scenarios that end with a conversation moved over to WhatsApp. That the move from ad to messaging happens between two products of the same company makes the question of responsibility even heavier. The Federal Trade Commission's consumer guides in the US describe these patterns in detail, and they largely apply to Turkish users as well.

What's next?

The first hurdle will be Meta's motion to dismiss; a Section 230 defense is likely to take center stage. If the court finds the case worth reaching the merits, discovery could bring up the breakdown of ad revenue by risk category and the design decisions behind the AI tools. It is also worth watching whether other states file similar suits; cases like this often start one by one and then turn into a coalition. In Europe, the Digital Services Act could raise similar liabilities through administrative channels.

Here is my assessment: proving that Meta deliberately designed fraud will be difficult. But the gap between "profiting from a problem it knows about and measures" and "making it easier to produce with AI tools" is narrowing. Awareness campaigns won't close it; the real test is being able to turn down a suspicious advertiser's money.