A major investigation by Reuters has exposed that tech giant Meta, the parent company of Facebook, Instagram, and WhatsApp, profited massively from fraudulent advertisements on its platforms. Internal company documents reveal that Meta earned over $3 billion from scam ads, illegal gambling, and pornography, despite repeated warnings from its own safety teams.
Billions in Revenue from Banned Content
According to the report, which reviewed a cache of internal documents from Meta's engineering, finance, lobbying, and safety divisions over the past four years, the company allowed Chinese companies to run ads globally. This practice generated a staggering $18 billion in annual sales revenue last year, accounting for more than 10% of Meta's global income. A significant portion of this, exceeding $3 billion, came directly from deceptive and banned content.
While Meta's platforms are officially banned in China, Beijing permits Chinese firms to advertise to foreign consumers. The internal assessment identified China as the top "Scam Exporting Nation" and the largest source of fraud across Facebook, Instagram, and WhatsApp, originating nearly 25% of all scam and banned-product ads on Meta's networks.
Internal Warnings and a Disbanded Team
Meta employees had raised alarms internally. In a presentation last year, staffers urged the company's head of safety operations that a "significant investment" was needed to "reduce growing harm." In response, Meta formed a dedicated anti-fraud team to monitor scam ads from China. This initiative initially showed success, reducing the revenue share from such ads from 19% to 9%.
However, the situation took a turn in late 2024. A document from that period indicates that Meta CEO Mark Zuckerberg asked the China-focused anti-fraud team to pause its work. Subsequently, the team was disbanded, and a ban preventing Chinese ad agencies from posting on Meta's platforms was lifted. Within months of this crackdown easing, the revenue from fraudulent ads reportedly jumped back to 16% of the total ad business revenue.
Meta's Response and Ongoing Concerns
When confronted by Reuters, Meta spokesperson Andy Stone stated that the team formed to combat Chinese ad fraud was always a temporary measure. He clarified that Zuckerberg did not order the team's disassembly but instead asked them to "redouble efforts to reduce them all across the globe, including in China." Meta claims to have removed 46 million ads from Chinese businesses in the last 18 months and ceased working with such agencies.
Despite these claims, Reuters noted that Meta did not answer specific questions about the internal documents. The report paints a picture of a company reluctant to implement fixes that could impact its lucrative revenue streams, choosing profitability over platform safety and integrity. This revelation adds to the growing list of controversies surrounding the social media behemoth and its leadership.
