Widespread Chinese Ad Fraud is a Boon for Meta’s Bottom Line

The social-media giant Meta has tolerated widespread advertising fraud tied to Chinese customers in order to protect billions of dollars in revenue, even after internal teams repeatedly flagged the activity as problematic, Reuters reported.

Meta’s China ad sales rose to more than $18 billion annually in 2024 yet internal documents indicate that the company’s leadership believed approximately 19% of that total, or more than $3 billion, came from ads linked to scams, illegal gambling, pornography and other banned content, Reuters reported.

The problem grew to such a degree that an internal presentation warned Meta executives in April 2024 that “significant investment” was needed to address the issue, the news agency said.

The company ultimately concluded that roughly a quarter of all scam and banned-product ads across its platforms worldwide could be traced back to China. Victims of the scam advertisements included investors in the United States and Canada who were swindled out of their savings and shoppers in Taiwan who spent money on fraudulent health supplements, according to the report.

In response, Meta formed a China-focused anti-fraud effort that used stepped-up enforcement tools. Internal tracking showed the company reduced problematic ads from China by roughly half in the second half of 2024, bringing the share of violating ads in China-linked revenue down from 19% to about 9%, Reuters said.

But the crackdown was short-lived. A late-2024 internal document cited “follow-up from Zuck” alongside an “Integrity Strategy pivot” and said the team was asked to pause its work. After that, the company disbanded the China-focused anti-scam team, lifted a freeze on onboarding new Chinese ad agencies, and shelved additional measures that internal tests suggested would work, according to the documents described by Reuters.

By mid-2025, banned ads had climbed to roughly 16% of Meta’s China revenue.

Meta relies on 11 major Chinese ad agency partners that sell ads and recruit smaller agencies. The system can create layers of intermediaries that make it harder to identify who is ultimately buying ads and what they are promoting, Reuters found.

A consultancy report commissioned by Meta from Propellerfish warned that the tech company’s own policies were fostering systemic corruption in the market, including minimal identity requirements for advertisers, tools that mask advertiser identities, and tactics that evade enforcement, the news agency said.