Meta Shifts Its Compliance Strategy in China Amid Surging Ad Fraud (2025 Update)
- Why Did Meta’s China Ad Revenue Double in Two Years?
- How Effective Was Meta’s Anti-Fraud Team?
- What Role Do Chinese Ad Networks Play?
- Why Is Enforcement Weaker Than TikTok or Google?
- Did Meta’s 2025 Reforms Work?
- What’s Next for Meta’s China Problem?
- FAQs: Meta’s China Ad Fraud Crisis
Meta's advertising revenue from China skyrocketed to over $18 billion in 2024, but nearly 20% of it was tied to scams, illegal gambling, and banned products. Despite forming a temporary anti-fraud team that reduced violations, internal documents reveal CEO Mark Zuckerberg halted enforcement efforts, leading to a resurgence of fraudulent ads. By mid-2025, prohibited ads accounted for 16% of China-sourced revenue. This DEEP dive explores Meta’s compliance struggles, the role of Chinese ad networks in global scams, and why the company’s tools—and policies—may be part of the problem.
Why Did Meta’s China Ad Revenue Double in Two Years?
Meta’s ad revenue from China exploded from $7.4 billion in 2022 to $18.4 billion in 2024, according to internal data. While Beijing blocks platforms like Facebook domestically, it allows Chinese firms to target foreign audiences—creating a lucrative loophole. But there’s a catch: Reuters reported that $3 billion of that 2024 revenue came from ads linked to fraud, counterfeit goods, and other violations. One Meta document bluntly labeled China the "Nation Exporting Scams."
How Effective Was Meta’s Anti-Fraud Team?
In early 2024, Meta assembled a task force that slashed prohibited ads from 19% to 9% of China revenue within six months. But the effort collapsed after Zuckerberg intervened. Internal files cited a "Zuck track" directive pausing crackdowns. The team was disbanded, ad agency freezes lifted, and proven compliance measures shelved. Consultants at Propellerfish warned Meta its own policies aided scammers—yet by 2025, violations rebounded to 16%. Former integrity head Rob Leathern called the levels "indefensible."
What Role Do Chinese Ad Networks Play?
Meta relies on a pyramid of 11 top-tier Chinese agencies (like GatherOne and Cheetah Mobile) that recruit smaller resellers. Propellerfish’s investigation found rampant fake accounts, AI-generated documents, and "ad optimization specialists" funded by underground lenders. For under $30 in crypto, fraudsters bought access to mid-tier agency accounts, flooding Meta with get-rich-quick investment scams. Despite internal warnings, Meta delayed penalizing high-spending partners due to revenue concerns.
Why Is Enforcement Weaker Than TikTok or Google?
Internal records admit Meta’s standards lag rivals. One policy explicitly avoided "full parity" with global norms, accepting China’s "current harm level." For example, Beijing Tengze Technology violated rules in over half its ads—yet Metaits budget instead of cutting ties. Tengze later vanished, with its registered address nonexistent. Meanwhile, the FBI seized $214 million from a Chinese stock scam using Meta ads to funnel victims to WhatsApp groups impersonating U.S. brokers.
Did Meta’s 2025 Reforms Work?
After adjusting agency commissions based on ad quality, Meta saw no improvement. A May 2025 review found 800 accounts generated $28 million in violating ads monthly—75% from partner-shielded entities. Staff proposed shutting the worst offenders (costing $2.8M/month in harmful ads) but hesitated, noting the "revenue impact." One document conceded: "Earnings WOULD likely bounce back."
What’s Next for Meta’s China Problem?
With U.S. senators demanding investigations and scams evolving, Meta’s balancing act—profit vs. integrity—grows harder. Automated tools blocked 46 million Chinese ads in 18 months, but as spokesperson Andy Stone admitted, "Scammers constantly adapt." For now, the math is stark: Fraud may be Meta’s fastest-growing "product line" in China.
FAQs: Meta’s China Ad Fraud Crisis
How much of Meta’s China revenue comes from scams?
In 2024, about 19% ($3 billion) of Meta’s $18.4 billion China ad revenue was linked to fraudulent or prohibited content, per Reuters.
Why did Zuckerberg stop the anti-fraud measures?
Internal documents suggest revenue priorities overruled compliance. After the task force’s success, a "Zuck track" order paused enforcement.
Are Chinese authorities involved?
Propellerfish’s report claims Beijing ignores violations targeting foreigners, creating a "no-risk" environment for scammers.
