Report: Meta was able to curb fraudulent advertising but has stopped
People in China are not allowed on Facebook & Co., but companies are allowed to advertise there. This is also used for fraud; Meta stopped these measures.
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US internet giant Meta has temporarily succeeded in significantly curbing multi-billion dollar ad fraud from China on Facebook and Instagram. However, the necessary measures were apparently halted at the request of top management. This is reported by the news agency Reuters, citing internal documents. According to the report, more than a tenth of Meta's revenue in 2024 came from advertising from China, where its internet services are not available at all. At the same time, a quarter of all fraudulent ads likely originated from the People's Republic. In the second half of the year, however, Meta was able to halve the advertising revenue generated by this before the necessary action was paused.
According to Reuters, the widespread fraud is based on Meta's special relationship with China. Facebook, Instagram, and WhatsApp are blocked there, so people cannot access them. At the same time, the People's Republic allows companies in the country to display ads on the platforms that people in the rest of the world see. For this reason too, Beijing likely has little interest in taking decisive action against fraud conducted through ads. According to Reuters, Meta investigated that before countermeasures were taken, 19 percent of advertising revenue from China was paid for fraudulent ads.
Countermeasures stopped
The advertising business from China is reportedly conducted through several large and numerous small agencies. The complex system virtually invites fraud, with ads for illegal gambling and prohibited goods, for example. The scale is reportedly so large that Facebook & Co. notice the impact of Chinese holidays by a decrease in the number of fraudulent ads worldwide. To combat this, Meta reportedly set up a special team in mid-2024, which actually succeeded in significantly curbing the problem. After the work had to be stopped on instruction from above, the revenue generated from China through fraudulent ads rose again to 16 percent, thus almost back to the previous level.
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A former Facebook manager described the extent of the problem tolerated by Meta as “indefensible”: “I don't understand how anyone could think that this is OK.” The company spokesman, on the other hand, stated that the work of the fraud prevention team was always only intended to be temporary. Meta CEO Mark Zuckerberg did not order the measures to be stopped. Instead, the focus was on advancing actions against fraud worldwide. In addition, millions of fraudulent ads are stopped every month, “usually before anyone gets to see them.” However, he did not answer many of Reuters' questions.
(mho)
