Meta Platforms Inc. (META) is facing renewed scrutiny from Capitol Hill over allegations that it's raking in billions from fraudulent advertisements on Facebook and Instagram. And this time, the criticism is bipartisan.
U.S. Senators Richard Blumenthal (D-Conn.) and Josh Hawley (R-Mo.) have formally called on federal regulators to investigate the social media giant, citing internal company documents that paint an unflattering picture of Meta's advertising practices. According to reports from Reuters, those documents suggest Meta could be earning as much as $16 billion annually from hosting ads for scams, illegal products, and high-risk fraudulent schemes.
That's not exactly the kind of revenue stream you want to brag about in quarterly earnings calls.
The senators aren't pulling punches either. In their formal request to the Federal Trade Commission and the Securities and Exchange Commission, they wrote that "Meta's central, facilitating role in scams against consumers is unprecedented: by its own employees' assessment, Meta was involved in one-third of all successful scams in the U.S. and was unmatched by other Big Tech platforms."
One-third of all successful scams. Let that sink in.
Blumenthal and Hawley are demanding aggressive enforcement action that would force Meta to disgorge all profits earned from fraudulent advertising, face steep civil penalties, and hold individual executives personally accountable. They argue that Meta made conscious, business-driven decisions to enable and profit from this activity.
The evidence? The senators point to Meta's public ad library, which still contains easily identifiable scam ads including crypto fraud schemes, illicit gambling operations, and deepfakes impersonating politicians. If your fraud detection system can't catch ads that senators can spot by browsing your public archive, that's not a great look.
Adding fuel to the fire, the senators allege that Meta reduced its safety staff while simultaneously pouring resources into artificial intelligence development. That combination, they argue, has made Meta's platforms a "scourge on consumers, our economy, and our national security."
MarketDash reached out to Meta for comment but did not receive an immediate response.
