In a nutshell: Meta has faced several controversies over the years, including the misuse of private data for political profiling, failing to stop the spread of fake news and hate speech, and ignoring the impact of Facebook and Instagram on the mental well-being of young people. A new report now claims the company has also knowingly accepted fraudulent and scam ads originating in China.
According to an investigation by Reuters, Meta earned more than $3 billion in China last year through scam ads for illegal gambling, pornography, and other inappropriate content. That figure represents nearly 19 percent of the company's $18 billion in total ad revenue from China during the same period. Reuters had previously reported that 10 percent of Meta's global revenue came from fraudulent ads.
An internal investigation by Meta reportedly found that nearly 25 percent of the ads shown on its platforms originated in China, with many of the fraudulent ads targeting users in Taiwan, the United States, and Canada.
Investigators recommended that the company make a substantial investment to reduce the "growing harm" faced by children and young adults on its social media platforms.
Meta initially formed a task force to address rampant ad fraud across Facebook, Instagram, and WhatsApp. The team succeeded in reducing scam ads by nearly 50 percent by the end of 2024. However, the task force was later disbanded following an intervention by Mark Zuckerberg, leading to a marked increase in fraudulent ads over the subsequent months.
The investigation suggests Meta knew about the scale of the ad fraud problem on its platforms, but chose not to act because it would have affected revenue. Rob Leathern, a former senior director of product management at Facebook, said the volume of fraudulent ads on the platforms is "not defensible" and that the company should address the issue on a war footing.
In a statement to Reuters, Meta spokesperson Andy Stone said the anti-fraud team was always intended to be temporary and that Zuckerberg did not direct its dissolution.
Stone added that the Meta CEO instructed teams handling scams and other high-risk threats to "redouble efforts" to reduce all forms of fraud across Facebook, Instagram, and other Meta properties.