Two prominent US senators have demanded federal investigations into Meta Platforms Inc., alleging the social media giant earns billions from scam advertisements on Facebook and Instagram.
Bipartisan Call for Federal Action
Republican senator Josh Hawley and Democratic senator Richard Blumenthal have jointly written to the Federal Trade Commission (FTC) and Securities and Exchange Commission (SEC), urging immediate investigations into Meta's advertising practices. The senators cited internal documents revealing that Meta generates approximately $3.5 billion in revenue every six months from what it internally classifies as 'higher risk' scam advertisements.
In their letter to the federal agencies, the senators stated: "The FTC and SEC should immediately open investigations and, if the reporting is accurate, pursue vigorous enforcement action where appropriate" to force Meta to disgorge profits, pay penalties and agree to cease running such advertisements.
Internal Documents Reveal Systemic Issues
The senators' action follows Reuters reporting that examined internal Meta documents from late 2024. These documents indicated that Meta estimated its platforms were involved in approximately one-third of all scams occurring in the United States. Additional documents suggested that Meta's anti-fraud rules didn't appear to apply to many advertisements that both regulators and the company's own staff believed violated the spirit of its rules against scam advertising.
According to the FTC, Americans lost an estimated $158.3 billion to scams last year, highlighting the massive scale of the problem facing consumers nationwide.
Meta's Response and Ongoing Concerns
In response to the allegations, Meta spokesman Andy Stone called the senators' claims "exaggerated and wrong." Stone stated: "We aggressively fight fraud and scams because people on our platforms don't want this content, legitimate advertisers don't want it and we don't want it either." The company also claimed it had reduced user reports of scams by 58% over the last 18 months.
However, the senators expressed skepticism about Meta's efforts, pointing to the company's own publicly accessible Ad Library database. "Even a short review of Meta's Ad Library at the time of this letter shows clearly identifiable advertisements for illicit gambling, payment scams, crypto scams, AI deepfake sex services, and fake offers of federal benefits," they wrote.
The senators highlighted particular concern about fake advertisements impersonating US government agencies or political figures, including an example of a bogus ad claiming Donald Trump was offering $1,000 to recipients of food assistance. Their letter noted that "while Meta has been warned about advertisement deepfakes impersonating politicians, it still continues to run fraudulent clips."
The lawmakers also raised alarms about safety staff reductions at Meta, noting the company had "drastically cut its safety staff, including for FTC mandated reviews, even as it dumps unimaginable sums into its generative AI projects." They identified that beneficiaries of these scams often include cybercrime groups based in China, Sri Lanka, Vietnam and the Philippines.
