According to Fortune, a Reuters investigation published Monday found that Meta generated roughly $18 billion in advertising revenue from China in 2024, about 10% of its global total. Nearly one-fifth of that, or around $3 billion, reportedly came from ads linked to scams, illegal gambling, and pornography, with Meta internally labeling China its top “scam exporting nation.” The report cites internal estimates of up to 15 billion “high-risk” fraudulent ads served daily and a 0.15% revenue “guardrail” that capped how much money Meta was willing to lose to crack down. In late 2024, Meta allegedly reinstated 4,000 previously suspended Chinese ad agencies, unlocking $240 million in annual revenue—half from policy-violating ads. Former Meta integrity chief Rob Leathern called the findings “disappointing,” while Meta’s Andy Stone disputed Reuters’ characterization on Threads.
The cost of doing business
Here’s the thing that’s so damning. This isn’t a story about a platform being tricked. It’s about a company making explicit, documented calculations. When internal documents show staff asking if growth teams would object to shutting down fraud accounts “given the revenue impact,” and the answer on penalizing high-spending scam partners is “No” due to “high revenue impact,” you’ve moved from a security failure to a business model feature. They reportedly treated regulatory fines as a predictable cost, figuring the revenue from risky ads would “almost certainly exceed” any settlement. That’s cold. That’s a choice.
The partner problem
And a huge part of that choice seems to be tied to their business partners. The report suggests over 75% of harmful ad spending came from accounts protected by Meta’s partner programs. Rob Leathern’s critique hits the nail on the head: if you’re measuring violation rates from certain partners and they’re consistently terrible, you just fire them. But that costs money in the short term. So instead, according to Reuters, they took down their entire partner directory for review and disbanded their China-focused anti-scam team. Not exactly the actions of a company getting a handle on the problem.
The trust tax
Leathern’s warning is the most important part, though. This isn’t just a moral issue; it’s an existential business one. “If people don’t trust advertisers, advertising, it reduces the effectiveness of that channel for all advertisers,” he said. Basically, if Facebook and Instagram become known as the places where you get scammed, the *legitimate* ads become worthless. The platform’s entire value erodes. And with generative AI making scams more plausible than ever, the pressure to fix this is mounting. But are they? We don’t really know. As Leathern points out, there’s a stunning lack of transparency into what these platforms are actually doing to fight ad fraud.
A systemic failure
Look, the human cost is already brutal. Reuters documented people losing life savings to fake crypto ads, buying counterfeit health products, and having their hijacked accounts used to scam others. Meta’s own internal staff reportedly estimated the platform was “involved” in a third of all successful U.S. scams. That’s staggering. Andy Stone can push back on Threads and talk about reduced user reports, but the picture painted by internal documents is of a system designed to maximize revenue, not integrity. The external audit saying Meta’s own policies promoted “systemic corruption” is about as blunt as it gets. This report should be a turning point. But will it be? Or is the revenue just too good to give up?
