Meta Chose Revenue Over Policing Chinese Scam Ads, Documents Show

Image Source: Pixabay Meta (META) knowingly tolerated large volumes of fraudulent advertising from China to protect billions of dollars in revenue, a new investigation from Reuters unveiled this week. Internal documents show executives prioritized minimizing “revenue impact” over fully cracking down on scams, illegal gambling, pornography and other banned ads.Although Meta platforms are blocked inside China, Chinese companies are allowed to advertise to users abroad, according to Reuters. That business grew rapidly, reaching more than $18 billion in revenue in 2024—about 11% of Meta’s global sales. Internal estimates showed roughly 19% of that revenue, more than $3 billion, came from prohibited or fraudulent ads.Meta documents reviewed by Reuters describe China as the company’s top “Scam Exporting Nation,” responsible for roughly a quarter of scam ads worldwide. Victims ranged from U.S. and Canadian investors to consumers in Taiwan. An internal presentation warned, “We need to make significant investment to reduce growing harm.”In 2024, Meta briefly did just that. A dedicated China-focused anti-fraud team cut problematic ads roughly in half, from 19% to 9% of China-related revenue. But after what one document described as an “Integrity Strategy pivot and follow-up from Zuck,” the team was asked to pause its work. Meta later disbanded the unit, lifted restrictions on new Chinese ad agencies, and shelved additional anti-scam measures.Within months, fraudulent advertising rebounded. By mid-2025, banned ads again made up about 16% of Meta’s China revenue. Former Facebook executive Rob Leathern said the scale of abuse was indefensible: “The levels that you’re talking about are not defensible. I don’t know how anyone could think this is okay.”Reuters writes that Meta relies on a network of Chinese ad resellers that receive commissions and special protections. Ads flagged for violations often remain live during lengthy secondary reviews, allowing scammers time to profit. One internal document acknowledged that the delay was “adequate for scammers to accomplish their objectives.”An external report commissioned by Meta concluded that the company’s own policies fostered systemic corruption. Because the ads target foreign users, Chinese authorities generally do not intervene, leaving fraudsters with “little or no risk.” Compared with competitors, the report found Meta’s enforcement in China to be inconsistent.Despite internal warnings, Meta decided it would permanently tolerate higher levels of misconduct from Chinese advertisers rather than seek parity with ad quality elsewhere. A February 2025 document said the company would aim only to “maintain the % of global harm” from China.Meta disputes aspects of Reuters’ findings, saying the China-focused team was always temporary and that Zuckerberg did not order its shutdown. The company says it has blocked or removed tens of millions of ads and cooperates with law enforcement. Still, internal discussions show enforcement proposals repeatedly scaled back because “the revenue impact is too high.”As one document bluntly concluded, even when abusive accounts are shut down, “It’s likely the revenue will return.”More By This Author:Ford To Lay Off 1,600 Workers As Kentucky EV Battery Plant Pivots To Data Center StorageWTI Holds 'Venezuela Blockade' Gains After Small Crude Draw, Record US ProductionPump-Prices Plummet As Ukraine Peace Deal Progress Sparks Oil Plunge