US senators Josh Hawley and Richard Blumenthal are urging federal regulators to investigate Meta (META) after internal documents suggested Facebook and Instagram may be earning billions from ads linked to scams and banned products.
In a letter to the FTC and SEC, the senators stated that Meta should face potential penalties, including forced profit disgorgement, and stricter oversight if the allegations are confirmed.
Reuters previously reported that Meta estimated roughly a third of all scams in the US involved its platforms, and that about 10 percent of its 2024 revenue, nearly $16 billion, could be tied to illicit advertising. The documents also indicated the company makes around $3.5 billion every six months from "higher risk" scam ads, and that many such ads bypass Meta's own anti-fraud policies.
Meta rejected the claims, saying scam reports have dropped 58 percent in the past 18 months and calling the senators' assertions exaggerated. But Hawley and Blumenthal pointed to Meta's publicly available ad library, where they said scam content, including fake gambling promotions, crypto fraud, payment schemes, AI deepfake sex services, and bogus federal benefit offers, is still easy to find.
The senators highlighted concerns about deceptive political ads, including fabricated clips impersonating public officials. They warned that many of these scams trace back to cybercrime groups overseas and argued that Meta's reduced safety staffing, despite heavy investment in generative AI, has allowed fraudulent ads to proliferate.
They noted FTC estimates showing Americans lost more than $158 billion to scams last year and said Meta's role demands immediate regulatory scrutiny.
META closed at $613.05, up 3.16%, and is trading after hours at $614.02, up 0.16%, on the NasdaqGS.
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