Internal Meta documents, spanning its finance, engineering, safety, and lobbying divisions over the past four years, reveal a stark conclusion: the social media giant was deriving a significant portion of its revenue from fraudulent advertisers originating in China, who were defrauding users across Facebook, Instagram, and WhatsApp worldwide.
According to Reuters, though China’s government prohibits its citizens from using Meta’s social media platforms, it permits Chinese companies to purchase ads to target foreign consumers. This policy has made China a crucial revenue source for Meta, with annual advertising sales from the country reaching over $18 billion in 2024, representing more than a tenth of the company’s global revenue.
The Scale of Illicit Revenue
Meta’s internal analysis revealed the uncomfortable reality that roughly 19% of its revenue from China—more than $3 billion—was derived from ads promoting scams, illegal gambling, pornography, and other banned content. Furthermore, Meta believed that China was the country of origin for approximately a quarter of all ads for scams and banned products across its global platforms.
The victims of this fraud were geographically diverse, ranging from investors in the United States and Canada who were swindled out of their savings to shoppers in Taiwan who purchased bogus health supplements.
Internal presentations from April 2024 warned Meta leaders that the company needed to “make significant investment to reduce growing harm.” The documents reflect a long-standing internal tension: a desire to police its platforms clashing with a reluctance to implement fixes that could sharply undermine its vital revenue stream.
Enforcement Efforts and Results
Responding to the mounting scale of the problem, Meta created a dedicated anti-fraud team to scrutinize problematic advertising activity originating from China. By utilizing stepped-up enforcement tools—which went beyond previous monitoring efforts—Meta successfully slashed the percentage of problematic Chinese ads by nearly half during the second half of 2024, reducing the figure from 19% to 9% of total advertising revenue from China.
Several technological and geopolitical factors compound the ability for fraudulent advertisers to thrive on Meta’s platforms:
- Ease of Account Creation: To place an ad, an advertiser only needs to establish a basic user account with a name and birthdate. The widespread availability of fake or stolen accounts makes it easy for fraudulent advertisers to quickly disguise their true identities.
- Evasion Tools: Chinese technology firms actively sell tools designed to obscure the advertisers’ real locations, mask their identities, and disguise fraudulent ads as innocuous content.
- AI-Generated Documents: Fraudsters are leveraging artificial intelligence to generate fake documentation, allowing them to evade verification attempts by Meta’s systems.
- “Ad Optimization Specialists”: An entire specialized industry of “ad optimization specialists” has emerged to exploit weaknesses in Meta’s enforcement systems. These specialists manage sophisticated, often large-scale, shady advertising campaigns funded by “informal” sources, including loan sharks.
The investigation by Propellerfish consultants highlighted a major geopolitical factor enabling the fraud: because the harmful advertising targets only overseas audiences, China’s government generally “turns a blind eye”, concluding that the violations do not interfere with Chinese citizens. This lack of domestic enforcement means crooked domestic advertisers face “little or no risk” of prosecution within China, allowing the abusive ecosystem to flourish.
The records also indicate that Meta’s own enforcement practices often prioritized revenue. For instance, the company typically only banned advertisers when automated systems predicted a 95% likelihood of fraud, a high evidentiary standard. Furthermore, some internal documents suggested that likely scammers scoring under that 95% threshold were sometimes not banned but were instead charged higher ad rates—a practice that effectively monetized suspicious activity.
