Two prominent US senators have formally requested federal agencies open an investigation into Meta Platforms, Inc., the parent company of Facebook and Instagram, concerning allegations the tech giant earns billions in revenue from fraudulent and illicit advertisements.
Bipartisan Call for Federal Action
In a significant bipartisan move, Republican senator Josh Hawley and Democratic senator Richard Blumenthal have penned a letter to the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC). They are urging the regulators to immediately open investigations into the revenue Meta generates from ads that promote scams and banned goods on its social media platforms.
The senators cited a recent Reuters report based on internal company documents from late 2024. According to their letter, the reporting indicates that Meta itself estimated its platforms were involved in approximately a third of all scams occurring in the United States.
Staggering Financial Figures and Internal Failures
The internal documents revealed shocking financial details. One specific document noted that Meta earns an estimated $3.5 billion in revenue every six months from what it classifies as ‘higher risk’ scam advertisements. Over the course of a full year, this illicit advertising was reportedly linked to around $16 billion.
Further documents suggested that Meta’s own anti-fraud rules appeared insufficient. They reportedly did not apply to a significant number of advertisements that both company staff and external regulators believed violated the spirit of Meta’s policies against scam advertising, even if they technically bypassed the letter of the law.
Meta's Response and Senatorial Skepticism
In response to the allegations, a Meta spokesman, Andy Stone, stated that the claims in the senators' letter were exaggerated and wrong. He emphasised that the company aggressively fights fraud and scams, arguing that such content is unwanted by users, legitimate advertisers, and Meta itself. Stone also pointed to the company's own metric, claiming it had reduced user reports of scams by 58% over the preceding 18 months.
However, Senators Hawley and Blumenthal expressed deep skepticism regarding Meta's efforts. They directed attention to Meta’s publicly accessible Ad Library, a database of advertisements running on its platforms. They claimed that even a brief review at the time of their letter revealed clearly identifiable ads for illicit gambling, cryptocurrency scams, payment fraud, AI deepfake sex services, and fake offers of federal government benefits.
The senators also highlighted the broader impact, noting that the FTC estimates Americans lost a staggering $158.3 billion to scams in the previous year. They accused Meta of allowing scams to proliferate while making drastic cuts to its safety and security teams, including those mandated for FTC reviews, even as it invested heavily in generative AI projects.
Specific Concerns Over Political Deepfakes
A particular area of concern raised in the letter involves fraudulent advertisements that impersonate official US government bodies or political figures. The senators provided a concrete example of a bogus ad that falsely claimed former President Donald Trump was offering $1,000 to people receiving food assistance.
Their letter states, While Meta has been warned about advertisement deepfakes impersonating politicians, it still continues to run fraudulent clips. They further noted that the beneficiaries of these sophisticated scams are often cybercrime groups based in countries including China, Sri Lanka, Vietnam, and the Philippines.
The senators have called on the FTC and SEC to not only investigate but to pursue vigorous enforcement action if the reports are accurate. This could force Meta to disgorge illicit profits, pay substantial financial penalties, and legally agree to cease running such advertisements in the future.
