Meta flags over $3 billion in China-linked ad revenue tied to scams

Internal assessments reveal a significant share of advertising income from China-backed businesses was connected to fraudulent and prohibited activities, prompting scrutiny of Meta’s enforcement priorities and renewed calls from US lawmakers for regulatory action.

Meta Platforms has internally estimated that more than $3 billion of its advertising revenue linked to Chinese-funded businesses was associated with scams and prohibited activity, according to documents reviewed by media reports. The findings highlight growing concerns over how fraudulent advertising continues to generate substantial income across major social media platforms.

Despite Facebook and Instagram being restricted for public use in China, Chinese businesses are permitted to advertise globally on Meta’s platforms. These ads have become a major revenue stream, accounting for over 10% of the company’s total advertising income, or roughly $18 billion. Internal reviews found that nearly one-fifth of this revenue was tied to illegal gambling, pornography and other banned categories.

Meta’s assessments also indicated that more than a quarter of scam-related advertisements originated from China. In response, the company formed a dedicated anti-fraud unit in 2024 following internal pressure to invest more aggressively in scam prevention. The team reportedly reduced fraudulent ads by about 10% during the latter half of the year.

However, documents suggest the initiative was later paused amid a broader shift in integrity strategy, after which the unit was disbanded and restrictions on onboarding new Chinese ad agencies were eased. By mid-2025, scams were still estimated to make up around 16% of Chinese-funded ad revenue.

Regulatory scrutiny and broader impact

Meta has defended its efforts, stating that online scams are rising globally due to increasingly sophisticated criminal networks. The company says it relies on advanced detection tools, partnerships with law enforcement, and user education to combat fraud, and removes advertisers found violating its policies.

The issue comes amid a sharp rise in internet-related financial crime. Global losses from online scams climbed more than 30% in 2024, exceeding $16 billion, according to law enforcement data. Meta reportedly earns billions annually from ads it internally categorises as high-risk.

The revelations have drawn political attention in the United States. Following earlier reporting, bipartisan lawmakers urged regulators to investigate whether Meta has enabled or profited from fraudulent schemes, adding pressure on the company to strengthen oversight of its advertising ecosystem.