According to CNET, US Senators Josh Hawley and Richard Blumenthal are demanding investigations into Meta after a Reuters report based on internal company documents revealed startling figures about scam advertising. The documents allegedly show that nearly 10% of Meta’s 2024 revenue—about $16 billion—came from what the company classified as “illicit advertising,” with $3.5 billion generated from “higher-risk” scam ads in just six months. The senators have sent letters to both the Federal Trade Commission and Securities and Exchange Commission urging immediate investigations and potential enforcement action including profit disgorgement and penalties. Meta spokesman Andy Stone called the allegations “exaggerated and wrong” while defending the company’s anti-fraud efforts.
The staggering scale of the problem
Here’s the thing about that $16 billion figure—that’s not just some rounding error. We’re talking about nearly one-tenth of Meta’s entire revenue stream potentially coming from fraudulent or deceptive advertising. And the internal documents apparently show Meta staff knew many ads violated the “spirit” of their rules against scams but let them run anyway because they didn’t technically break specific guidelines.
Basically, we’re looking at a system where the financial incentives might be working against user protection. When you’re making $3.5 billion from high-risk ads in six months, how motivated are you really to crack down? The senators claim Meta’s platforms might be involved in about a third of all US scams, linking to over $50 billion in consumer losses last year alone. That’s not just a platform problem—that’s an ecosystem problem.
When scams get political
Some of the most concerning allegations involve political impersonation. The senators point to specific examples like fake ads claiming Donald Trump was offering $1,000 to food assistance recipients. Now, think about the timing—we’re in an election year where political deepfakes and misinformation are already huge concerns. If foreign cybercrime groups from China, Vietnam, and other countries are behind these campaigns as alleged, we’re not just talking about financial fraud anymore.
And here’s what really worries me: Meta’s public Ad Library apparently still contains gambling ads, payment scams, and political deepfakes despite these internal documents. So the company knows there’s a problem, the senators know there’s a problem, but the questionable content keeps appearing. How does that square with Meta’s public commitment to user safety?
Meta’s defensive stance
Meta’s response has been predictably defensive. Spokesman Andy Stone says they “aggressively fight fraud and scams” because nobody wants this content—not users, not legitimate advertisers, and not Meta itself. But if that’s true, why are internal documents suggesting they made billions from exactly this type of content?
Look, I get that running ad platforms at Meta’s scale is incredibly complex. But when you’re talking about numbers this large—$16 billion representing 10% of revenue—it starts to look less like an oversight and more like a business model feature. The senators aren’t just asking for an investigation; they want Meta to “disgorge profits” and pay penalties if the allegations prove true. That could mean giving back billions.
What this means for tech regulation
This situation highlights the fundamental tension in social media business models. When your revenue depends on advertising, and questionable ads generate massive income, how hard do you really crack down? The FTC and SEC investigations could set important precedents for how we regulate tech platforms that profit from harmful content.
Think about it—if Meta really is connected to $50 billion in consumer losses through scam ads facilitated on its platforms, that’s not just a Meta problem. That’s a systemic issue affecting how all major tech companies approach content moderation versus revenue generation. The outcome here could reshape not only Meta’s practices but regulatory expectations across the entire industry.
