Profit Over Safety: Meta Earns $3B from Chinese Scam Ads, Executives Tolerated Fraud for Revenue Growth

Although Meta cannot offer services such as Facebook and Instagram within China, Chinese advertisers nonetheless constitute a critical pillar of its revenue. Yet beneath this relationship appears to lie a profound moral controversy.

According to an in-depth investigative report published by Reuters, Meta has, in order to safeguard its enormous advertising income from China, long tolerated a vast volume of scam, illegal gambling, and prohibited-product advertisements originating from the country. Internal documents reveal that even though Meta was fully aware that these advertisements harmed users worldwide, senior executives—under pressure to sustain revenue growth—seemingly chose to look the other way. In some cases, policy shifts even allowed fraudulent advertising to resurface. The report notes that in 2024, Meta’s advertising revenue from China surpassed USD 18 billion, accounting for more than 10 percent of its global revenue. Internal estimates suggest that roughly 19 percent of this sum—over USD 3 billion—was derived from advertisements promoting scams, illegal gambling, pornography, or other prohibited content.

This starkly underscores the dilemma Meta faces: on one hand, it must uphold platform safety and user trust; on the other, it finds itself unable to relinquish tens of billions of dollars in ethically tainted income. Unlike other markets, Meta has adopted a distinctive “agency model” in China, relying on 11 “top-tier” resellers (major advertising agencies) to recruit smaller, second-tier agencies. This multilayered structure effectively creates a firewall, making it exceedingly difficult for Meta to directly scrutinize advertisers at the lowest levels.

Fraud rings exploit several techniques to evade detection:

Identity obfuscation: using fake accounts or hijacked legitimate ones.
AI fabrication: generating counterfeit verification documents with AI tools.
Technical cloaking: purchasing software that shows review systems a benign page, while redirecting real users to scam websites after they click.

More troubling still is Meta’s internal “whitelisting” mechanism. To avoid alienating major clients, advertisements purchased through top-tier Chinese agencies receive special protection. Even when flagged by AI systems as violating policies, these ads are not immediately removed; instead, they remain live pending manual review. Due to staffing shortages, such reviews are often delayed for days or never completed at all, granting scam advertisements ample time to exploit victims. The investigation further exposes Meta’s wavering stance on combating fraud:

Early 2024: internal assessments confirmed that China was the source of 25 percent of scam advertisements worldwide.
Mid-2024 (crackdown phase): an anti-fraud task force was established and aggressive measures were deployed, reducing the share of scam-related revenue from China from 19 percent to 9 percent.
Late 2024 (pivot phase): CEO Mark Zuckerberg reportedly intervened, calling for a “strategic shift.” The anti-fraud team was subsequently disbanded, and freezes on new advertising agencies were lifted in order to “unlock” revenue.
Mid-2025: as restrictions eased, the proportion of prohibited advertisements quickly rebounded to 16 percent.

In response, Meta spokesperson Andy Stone stated that the anti-fraud team had always been temporary in nature, and that Mark Zuckerberg’s directive was intended to “double down” on combating fraud globally, not to abandon such efforts. The company claims that over the past 18 months it has intercepted 46 million violating advertisements from Chinese partners. In my view, however, this report once again lays bare—brutally and unmistakably—the trade-offs that technology giants make between shareholder interests and social responsibility. For Meta, the Chinese market occupies an exceptionally anomalous position: it does not require the company to provide services there (and thus incurs no user-maintenance costs), yet it delivers a steady and substantial stream of advertising revenue.

This structural windfall—profiting without accountability—severely weakens Meta’s incentive to eradicate fraud, since every blocked scam advertisement represents a tangible loss of revenue. While Meta emphasizes its use of AI to combat increasingly sophisticated criminal networks, unless design choices like whitelisting—where commercial logic overrides security safeguards—are dismantled, users’ news feeds are unlikely to become meaningfully safer or cleaner.

Rate this post

Related Posts:

Found this helpful?

Leave a Reply Cancel reply