A Reuters investigation alleges that Meta Platforms Inc. generated billions of dollars in advertising revenue from scam ads on Facebook and Instagram, while declining to roll out stronger safeguards that could have hurt profits.
The report says Meta brought in more than $3 billion from China in 2023 alone, largely from ads linked to illegal gambling, pornography, and other scams. That amount accounted for nearly 19 percent of the company’s $18 billion in China-based ad revenue that year. Reuters has previously reported that about 10 percent of Meta’s global ad income comes from fraudulent activity.
Internal company data reportedly showed the extent of the problem, indicating that nearly a quarter of all ads on Meta’s platforms originated in China. Many of those misleading ads were aimed at users in Taiwan, the United States, and Canada.
The investigation says Meta was fully aware of the systemic nature of the problem. An internal task force created to curb widespread ad fraud across Facebook, Instagram, and WhatsApp initially delivered results, cutting scam ads by nearly 50 percent by the end of 2024.
However, Reuters found that the task force was later dismantled after an intervention by CEO Mark Zuckerberg. In the months that followed, fraudulent ads surged back across Meta’s platforms.
According to the report, financial concerns played a role in the lack of action. Investigators and former employees indicate that Meta’s leadership recognized the seriousness of the ad fraud but resisted broader measures that could jeopardize an important revenue source. Internal investigators had recommended a “substantial investment” to reduce what they described as “growing harm” to children and young adults.
Rob Leathern, a former senior director of product management at Facebook, criticized the situation, calling the volume of fraudulent ads on Meta’s platforms “not defensible” and saying the company should respond with the urgency of a “war footing.”
Responding to the investigation, Meta spokesperson Andy Stone told Reuters that parts of the report were disputed. He said the anti-fraud team was “always intended to be temporary” and denied that Mark Zuckerberg ordered its shutdown.
Stone added that Meta’s CEO has since directed teams working on scams and other high-risk threats to “redouble efforts” to fight fraud across the company’s platforms.
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