Recent internal documents have revealed that Meta has been leveraging scam ad profits to fund its AI initiatives, according to a report from Ars Technica citing Reuters. The documents suggest that Meta has allowed billions in scam ad revenue to flow, despite acknowledging its role in the global fraud economy. These revelations come as Meta faces potential regulatory fines and plans to cut its scam ad revenue.
The report indicates that Meta has been showing its users an estimated 15 billion “higher risk” scam advertisements every day, generating about $7 billion in annualized revenue from this category. The documents also note that Meta’s automated systems only ban advertisers if they are 95% certain of their fraudulent activity, charging higher ad rates as a penalty for less certainty. This strategy has led to users seeing more scam ads due to ad-personalization, contributing to Meta’s role in the global fraud economy. The report highlights that Meta’s platforms are involved in a third of all successful scams in the U.S., raising concerns about the company’s role in enabling fraudulent activities.
While Meta acknowledges the issue and plans to reduce scam ad revenue, it faces potential regulatory fines, with internal documents suggesting these fines are unlikely to exceed its revenue from scam ads. The report also highlights that Meta’s safety staff has been ignoring a vast majority of user reports of scams, with 96% of reports being ignored or incorrectly rejected by 2023. The company has set a goal to improve this, aiming to dismiss no more than 75% of valid scam reports in the future.
Additionally, the documents reveal that some bigger spenders, known as “High Value Accounts,” could accrue more than 500 strikes without Meta shutting them down. The report underscores the complex challenges Meta faces in balancing its revenue streams with its responsibility to users and regulators, as it seeks to address its role in the global fraud economy.