Meta Shifts Its Enforcement Strategy in China Amid Rising Fraudulent Ad Revenue

• The Scale of Meta's China Ad Fraud Problem
• Meta's Short-Lived Anti-Fraud Efforts
• Why Did Meta Backtrack on Enforcement?
• The Global Fallout of China's Ad Networks
• Meta's Contradictory Stance
• What’s Next for Meta and China’s Ad Ecosystem?
• FAQs: Meta’s China Ad Fraud Crisis

In a revealing turn of events, Meta (formerly Facebook) has been grappling with a surge in fraudulent advertisements originating from China, which accounted for nearly 19% of its $18.4 billion ad revenue from the country in 2024. Despite temporary crackdowns, internal documents show enforcement efforts were scaled back after CEO Mark Zuckerberg intervened, leading to a resurgence of scams. This article delves into Meta's challenges, the global impact of Chinese ad networks, and the financial stakes involved.

The Scale of Meta's China Ad Fraud Problem

Meta's platforms—Facebook, Instagram, and WhatsApp—have become prime targets for Chinese advertisers pushing illegal gambling, counterfeit supplements, and investment scams. While China bans these platforms domestically, it permits businesses to market to foreign audiences, creating a lucrative but problematic revenue stream. In 2024, Chinese ad spending on Meta surged to $18.4 billion, up from $7.4 billion in 2022. Shockingly, 19% of this revenue came from prohibited ads, with victims spanning from Taiwanese consumers to North American investors.

Meta's Short-Lived Anti-Fraud Efforts

In early 2024, Meta assembled a dedicated anti-fraud team to tackle the issue. Their efforts initially reduced banned Chinese ads from 19% to 9% by mid-year. However, internal records reveal that after what was described as "a follow-up inquiry from Zuck," Zuckerberg ordered the team to ease enforcement. The task force was dissolved, new Chinese ad agency approvals resumed, and proven monitoring tools were shelved. By 2025, banned ads rebounded to 16% of China-sourced revenue.

Why Did Meta Backtrack on Enforcement?

Financial incentives appear to have played a key role. Documents show Meta hesitated to penalize high-revenue partners, with one employee noting, "The impact on revenue is too significant." Even when Beijing Tengze Technology—a firm tied to half of all policy-violating ads—was caught, Meta opted to raise its fees rather than terminate the contract. The company later vanished, only to resurface under another name.

The Global Fallout of China's Ad Networks

Chinese reseller networks exploit Meta's platform through layered agencies, fake accounts, and AI-generated documents. A Propellerfish report highlighted that Beijing turns a blind eye when scams target foreigners, enabling fraudsters to operate with "little to no risk." In March 2025, U.S. prosecutors seized $214 million from a Chinese stock scam using Meta ads to lure victims via WhatsApp. Meanwhile, Meta's automated tools blocked 46 million Chinese ads over 18 months—a drop in the bucket compared to the scale of the problem.

Meta's Contradictory Stance

While spokesperson Andy Stone emphasized Meta's "redoubled efforts" globally, internal metrics tell a different story. The company knowingly maintained partnerships with violators, fearing revenue loss. A May 2025 analysis found 800 accounts generated $28 million in policy-breaking ads in one month, 75% of which came from partner-protected accounts. When staff proposed shutting down the worst offenders, they were asked, "Will growth teams oppose this given the revenue impact?"

What’s Next for Meta and China’s Ad Ecosystem?

With U.S. senators calling for investigations and victims multiplying worldwide, Meta faces mounting pressure. Yet its reliance on Chinese ad dollars creates a paradox: stricter enforcement could dent profits, while laxity risks regulatory blowback. As one former integrity head bluntly put it, "These levels are indefensible. I don’t know how anyone finds this acceptable."

FAQs: Meta’s China Ad Fraud Crisis

How much of Meta’s China revenue comes from fraudulent ads?

In 2024, 19% of Meta’s $18.4 billion China ad revenue was linked to prohibited content, including scams and illegal products. This dropped to 9% after a crackdown but rebounded to 16% in 2025.

Why did Meta scale back its anti-fraud measures?

Internal documents suggest revenue preservation was prioritized. After Zuckerberg’s intervention, the company dissolved its China task force and reinstated high-risk ad partners.

Are Chinese authorities involved in these scams?

While Beijing bans such practices domestically, reports indicate it doesn’t intervene when foreign users are targeted. This creates a permissive environment for cross-border fraud.