According to Reuters, the attorney general of the U.S. Virgin Islands, Gordon C. Rhea, has sued Meta Platforms in Superior Court on St. Croix. The lawsuit, filed on December 30, accuses the owner of Facebook and Instagram of knowingly profiting from advertisements for scams, illegal gambling, and banned products. It heavily cites a Reuters report from last month which revealed internal Meta documents projecting that 10% of its 2024 revenue, or about $16 billion, would come from such ads. The report also stated Meta only blocks advertisers suspected of scams when its algorithms are 95% certain of misbehavior. The lawsuit further alleges Meta misled the public and regulators about its efforts to protect children on its platforms. In response, Meta spokesman Andy Stone called the allegations baseless, pointing to a 50% drop in user scam reports over 18 months.
The lawsuit’s real weight
Here’s the thing: this isn’t just another angry state AG filing. It’s the first one to directly weaponize that explosive Reuters investigation into Meta’s internal financial projections for scam ads. That $16 billion figure isn’t a guess from an outside critic; it’s Meta’s own internal math. That’s devastating context. The lawsuit is basically saying, “You knew the scale of the problem, you knew it was a massive revenue stream, and you chose a 95% certainty threshold that let a lot of bad actors slip through.” That’s a much harder narrative for Meta to shake than vague claims of “not doing enough.”
The child safety angle
And then there’s the child safety part. This isn’t just about creepy ads. The suit ties in that other wild Reuters report from August about internal AI guidelines that, at one point, allowed chatbots to engage in “romantic or sensual” conversations with minors. Meta said it removed those portions, but the damage to its credibility is done. The AG’s filing stitches these two threads together—monetizing fraud and failing to protect kids—to paint a picture of a company that prioritizes engagement and revenue over basic user safety. It’s a brutal one-two punch.
So what happens now?
Look, the U.S. Virgin Islands isn’t the FTC or the DOJ. But this lawsuit does two crucial things. First, it keeps this damaging story in the legal and public spotlight, applying steady pressure. Second, and maybe more importantly, it acts as a blueprint. Other state attorneys general, or even federal regulators, can look at this filing and its use of internal documents as a model for their own actions. Remember, two U.S. senators already called for SEC and FTC investigations after the Reuters story. This lawsuit adds fuel to that fire. Meta can say the claims are meritless all day, but fighting this in court means those internal documents could see the light of day in a legal discovery process. That’s probably the last thing Meta wants.
Basically, Meta’s defense boils down to: “We’re trying, see our metrics?” But when you’re facing your own internal projections showing scam ads as a core, multi-billion dollar business segment, “we’re trying” starts to sound pretty hollow. This case might hinge on whether a court believes that 95% certainty threshold is a responsible standard or a deliberate business calculation. I think we all know which side the AG is betting on.
