A large portion of Meta’s revenue, the parent company of Facebook, WhatsApp and Instagram, comes from scam ads. At the end of last year, Meta estimated that 10 percent of its total revenue, or about $16 billion (approximately ₹1419 billion), came from advertisements for scams and banned products. This has come to light in the internal documents of the company. According to a Reuters report, the social media company failed to detect or block advertisements for fake e-commerce and investment schemes, illegal online casinos and banned medical products for at least three years. These ads continued to appear to billions of users on Facebook, Instagram and WhatsApp.
The company serves 15 billion high-risk ads every day
According to internal company documents, approximately 15 billion “high-risk” ads are served on the Meta platform every day. These advertisements clearly indicate fraud. Meta earns $7 billion annually from this type of advertising. These ads come from marketers who seem shady.
This means that these can be easily flagged by Meta’s internal warning system. The company bans such ads only when its automated system has a 95% chance of being a scam. If the probability of fraud is low, Meta charges more for such ads. This means that even when there is potential for fraud, the company still charges more for serving ads.
One click, then more scam ads
According to company documentation, users who click on such ads see more ads. This is due to the company’s ad-personalization system, which attempts to show ads based on users’ preferences. Sandeep Abraham, a former security investigator at Meta, says that if regulators do not allow banks to profit from fraud, then tech companies should not be allowed to do the same.
Meta spokesperson Andy Stone called the allegations misleading. He said the allegation that 10.1% of Meta’s total revenue in 2024 came from fraud is “unfounded and exaggerated”. The company acknowledged that the number of such ads was small and most were legitimate. However, he did not give any specific numbers.
