The news: A group of Swedish publishers is suing Meta over scam ads on Facebook.

• The publishing group, Utgivarna, accused Meta of fraud, complicity in fraud, and preparation for fraud due to Facebook ads that impersonate Swedish journalists and media brands.
• Utgivarna said Swedish publishers have tried and failed to get the scam ads removed through Meta’s alert systems, and that “obvious frauds” continue to run on Facebook and Instagram, per the UK Press Gazette.

Beyond the publishers’ lawsuit, the US Securities and Exchange Commission (SEC) and UK Financial Conduct Authority (FCA) are investigating Meta’s role in financial scams. Meta is also being sued by the Australian Competition and Consumer Commission (ACCC) and faces a class-action lawsuit in California over the ads issue, per Bloomberg Law.

The background: The advertising giant knowingly earned 10% of its annual revenues in 2024—roughly $16 billion—from scam ads and banned product ads, according to internal documents reviewed by Reuters.

The ads often included images of celebrities or recognizable brand names to appear legitimate, and may have directed users to online stores that sell counterfeit or low-quality goods.

US adults lost $1.9 billion to social media scams in 2024, per the Federal Trade Commission (FTC).

Why it matters: Scammy ads and fraudulent promotions circulating on major social platforms could increase consumers’ hesitancy to engage with legitimate ads or unfamiliar brands. This scam fatigue presents a hurdle for companies trying to acquire new customers.

Consumers already tend to favor familiar brands, with 84% of global purchases driven by preexisting brand bias, per WPP Media. This heightens the value of earned, shared, and owned (ESO) media, which may encourage brand exploration more effectively than paid placements.

What it means for advertisers: The proliferation of scammy ads could damage the perceived value of advertising on Meta platforms. The lawsuit could draw attention to the dangers that brands and individuals face when their name is improperly used to promote low-quality goods or scams, and how surfacing alongside fraudulent content can reduce the efficacy and value of legitimate ads.

We’re likely to see more lawsuits from other publishers who are seeking to protect their brand, name, and ability to earn trust from new consumers.

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