The attorney general of the US Virgin Islands has filed a comprehensive lawsuit against Meta Platforms, marking a significant legal challenge to the social media giant's advertising practices and child safety measures. The lawsuit, filed in the Superior Court of the Virgin Islands on St. Croix, accuses Meta of deliberately profiting from fraudulent advertisements while failing to protect users, particularly children, on its Facebook and Instagram platforms.

Revenue Projections from Fraudulent Content

The lawsuit draws heavily on internal Meta documents that reveal concerning financial projections related to fraudulent advertising. According to these internal company materials, Meta projected significant revenue from questionable sources:

The documents also revealed Meta's internal policy requiring 95% algorithmic certainty before blocking advertisers suspected of fraudulent activities. This high threshold effectively allows numerous suspected scammers to continue advertising on the platform, according to the allegations.

Legal Action and Regulatory Response

Attorney General Gordon C. Rhea emphasized the groundbreaking nature of this legal action, stating it "marks the first effort by an attorney general to address reports of rampant fraud and scams on Meta's platforms." The lawsuit seeks penalties for violations of the Virgin Islands' consumer protection laws.

The legal action has garnered attention from federal lawmakers, with two US senators calling on both the Securities and Exchange Commission and the Federal Trade Commission to investigate the matter and pursue appropriate enforcement actions.

Child Safety Allegations

Beyond fraudulent advertising, the lawsuit addresses Meta's handling of child safety on its platforms. The Virgin Islands alleges that Meta misleads the public about its protective measures while failing to implement stated policies effectively. Specific concerns include:

• Inadequate protection of minors from harmful content
• Misleading statements to parents, regulators, and Congress about platform safety
• Inconsistent implementation of written safety policies

The lawsuit references internal Meta documents from August that initially permitted the company's artificial intelligence chatbots to "engage a child in conversations that are romantic or sensual." Meta subsequently removed these guidelines following media reports.

Meta's Response and Defense

Meta spokesman Andy Stone responded to the lawsuit by referring to previous company statements defending its consumer protection efforts. Stone characterized allegations of failed consumer protection as "baseless" and highlighted the company's anti-fraud initiatives.

Key points in Meta's defense include:

• Aggressive fighting of fraud and scams on platforms
• 50% reduction in scam reports from users over the past 18 months
• Strong disagreement with child safety allegations
• Commitment to supporting young users on platforms

Stone emphasized that fraudulent content is unwanted by users, legitimate advertisers, and Meta itself, positioning the company as actively working against such material rather than profiting from it.

Implications and Industry Impact

This lawsuit represents a significant challenge to Meta's business practices and could influence how social media platforms handle advertising oversight and child safety measures. The case highlights ongoing tensions between platform revenue generation and user protection, particularly regarding vulnerable populations like children. The outcome may establish important precedents for how attorney generals can address social media platform responsibilities at the state and territorial level.

Meta has officially announced the acquisition of Manus, a Chinese-founded artificial intelligence startup, on Monday, December 29, marking a strategic move to strengthen its push into advanced, autonomous AI agents for consumers and businesses. The acquisition represents Meta's continued commitment to transforming AI research into profitable business applications under CEO Mark Zuckerberg's strategic direction.

Official Acquisition Announcement

In a statement, Meta said Manus will help it bring "a leading agent to billions of people" and unlock new opportunities for businesses across its products. The company emphasized that Manus has built one of the more advanced general-purpose AI agents capable of independently executing complex tasks.

Advanced AI Agent Capabilities

Manus has developed sophisticated AI technology that demonstrates significant scale and capability. The startup's AI agent system showcases impressive operational metrics and versatile functionality across multiple business applications.

Multi-Purpose AI Agent Functions

The AI agent technology offers comprehensive task execution capabilities including:

• Market research and business intelligence
• Coding and software development tasks
• Data analysis and processing
• Complex workflow automation
• Multi-step task completion with minimal human intervention

Strategic Integration and Operations

CEO of Manus Xiao Hong stated, "Joining Meta allows us to build on a stronger, more sustainable foundation without changing how Manus works or how decisions are made." The startup will continue operating its subscription-based service while integrating technology into Meta's ecosystem. Manus' engineering and research team will join Meta as part of the deal, and the company will maintain its Singapore operations base.

Market Position and Industry Impact

The acquisition emphasizes Meta's growing focus on agent-based AI systems that can carry out multi-step tasks with minimal human intervention, an area that has become a key battleground among global tech companies. Meta said the acquisition will help scale Manus' technology to a wider user base, including businesses, while integrating capabilities across consumer and enterprise products such as Meta AI. This strategic move supports Meta's broader transformation to diversify revenue streams beyond traditional social media advertising through direct AI monetization opportunities.