US senators demand probe into scam ads on Facebook, Instagram
What's the story
US Senators Josh Hawley and Richard Blumenthal have urged the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC) to investigate Meta Platforms. The request comes after a Reuters report revealed that the social media giant earns revenue from advertisements promoting scams and banned goods on its platforms, Facebook and Instagram.
Investigation request
Senators demand action against Meta
In their letter to the federal agencies, Hawley and Blumenthal wrote, "The FTC and SEC should immediately open investigations and, if the reporting is accurate, pursue vigorous enforcement action where appropriate." They want Meta to give up profits from these ads, pay penalties, and agree not to run such advertisements in future. The senators are responding to a Reuters report that internal documents from late 2024 revealed Meta made about $16 billion from illicit advertising.
Financial details
Meta's revenue from 'higher risk' scam ads
The report also revealed that Meta earns $3.5 billion in revenue from "higher risk" scam ads every six months. However, other documents indicated that Meta's anti-fraud rules didn't seem to apply to many ads which regulators and the company's own staff thought "violated the spirit" of its rules against scam advertising. In response to these allegations, a Meta spokesperson said the company had reduced user reports of scams by 58% over the last 18 months.
Doubts raised
Senators question Meta's anti-fraud efforts
Hawley and Blumenthal expressed doubts about Meta's commitment to fighting illicit advertising. They pointed out the company's "ad library," a publicly accessible database of ads on its platforms. The senators claimed that even a cursory look at this library revealed clearly identifiable ads for illegal gambling, payment scams, crypto scams, AI deepfake sex services, and fake offers of federal benefits.
Scam statistics
Meta's platforms linked to 33% of US scams
The senators also highlighted that Meta estimated its platforms were involved in a third of all scams in the US. They noted FTC estimates that Americans lost $158.3 billion to scams last year, suggesting Meta was responsible for over $50 billion in consumer loss. Their letter alleges that Meta has knowingly accepted ads promoting fraudulent activities despite these numbers.
Staffing concerns
Senators criticize Meta's staffing decisions amid rising scams
The senators criticized Meta for allowing scams to flourish on Facebook and Instagram while drastically cutting its safety staff. They said this was done even as the company invests heavily in generative AI projects. Hawley and Blumenthal also expressed particular concern about fake ads impersonating the US government or political figures, citing an example of a bogus ad claiming President Donald Trump was offering $1,000 to food assistance recipients.