Meta Platforms (NASDAQ: META) built an $18.4 billion China ad business in 2024 while internally estimating that about 19% of that revenue, more than $3.0 billion, came from scams, illegal gambling, pornography, and other banned content, according to internal documents reviewed by Reuters.
China contributed “over $18 billion” in annual sales in 2024 and was described as 11% of Meta’s overall revenue, creating a large incentive to manage enforcement around downside risk to reported advertising totals. Meta also assessed China as the origin of roughly a quarter of all ads for scams and banned products across its platforms worldwide.
A China-focused anti-fraud effort cut the share of problematic ads from 19% of China revenue to 9% in the second half of 2024, implying roughly a halving of the abusive share while preserving the remaining 91% of China revenue as compliant or non-flagged. A late-2024 document attributes a pause to an “Integrity Strategy pivot and follow-up from Zuck,” after which the China-focused team was disbanded, a freeze on onboarding new Chinese ad agencies was lifted, and other effective measures were shelved without details.
Within months, Reuters reports that banned ads rose again to about 16% of Meta’s China revenue by mid-2025, erasing most of the 2024 gains and re-expanding the revenue tied to violations.
Reseller economics and “protections”
Meta sells most China-origin ads through 11 “top tier resellers,” paying roughly a 10% commission and granting enforcement protections such as “whitelisting” or “mistake prevention,” where flagged ads are not immediately removed and instead wait for secondary human review. One internal document warns the delay is “adequate for scammers to accomplish their objectives by gaining massive impressions.”
Internal tracking on partner onboarding tied misconduct directly to monetization: annualized $240 million of advertising from newly verified resellers in 2024 was assessed as 50% violating Meta rules, alongside internal notes stating “We are seeing harm from these newly verified agencies.”
A May 2025 document sampling found 800 ad accounts generated $28 million in violating ads in the prior month, with more than 75% of that spend coming from accounts receiving partner protections.
In that same May 2025 episode, one internal exchange rejects punishing big-spending partners because “the revenue impact is too high,” and instead discusses shutting down a smaller subset of accounts representing $2.8 million of harmful ads per month, while acknowledging “it’s likely the revenue will return” as advertisers reroute spend.
Meta also adjusted reseller commissions in early 2025 to pay less for higher violation rates, while internal documents suggest the change did not materially shift tactics.
Separately, Reuters reported Meta earns $7.0 billion annually from the portion of scam ads it labels “high risk,” and projected that 10% of 2024 revenue, about $16.0 billion, would come from scams, illegal gambling, and banned products.
Meta documents cited Shein and Temu as not driving the fraud problem while being the largest advertisers anywhere on Facebook and Instagram, averaging a combined $17.0 million per day, versus Amazon at $4.8 million daily, with smaller Chinese businesses recruited via reseller networks cited as the more common source of prohibited ads.
Information for this story was found via Reuters and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
