Meta Allegedly Profited by $16B From Scam Ads. US Senators Demand FTC, SEC Probe

Core Viewpoint - US Senators are calling for an investigation into Meta for allegedly profiting from scam advertisements on its platforms, with estimates suggesting that nearly 10% of Meta's 2024 revenue, approximately $16 billion, may come from such ads [1][3]. Group 1: Allegations and Investigations - Senators Josh Hawley and Richard Blumenthal have urged the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC) to investigate Meta and take enforcement actions if the allegations are substantiated [1]. - Internal Meta documents reportedly indicate that the company earned $3.5 billion in six months from "higher-risk" scam ads, raising concerns about the effectiveness of its ad policing [1][2]. - The senators claim that Meta's platforms may be implicated in "about a third of all US scams," contributing to over $50 billion in consumer losses last year [5]. Group 2: Meta's Response and Business Model Concerns - Meta has denied the allegations, with a spokesman stating that the claims are "exaggerated and wrong," and emphasized the company's commitment to fighting fraud [6]. - The scale of the alleged fraud raises questions about Meta's business model, particularly regarding its reliance on deceptive advertising practices [3][8]. - The senators highlighted that despite Meta's reported 58% reduction in scam ads over 18 months, broader trends suggest ongoing issues within its ad ecosystem [5]. Group 3: Broader Implications and Risks - The senators' push for regulatory action reflects concerns about the potential for Meta's ad system to fuel fraud at an unprecedented scale, which could lead to significant changes in regulatory expectations for major tech companies [8]. - There are concerns that foreign cybercrime groups may be behind many of the scam campaigns, further complicating the issue [7].