What Next: TBD | Tech, power, and the future · Slate Podcasts

How Meta Profits Off Fraud

November 16, 2025·29 min·2 clips

Meta projected that 10% of its revenue, up to $16 billion, comes from scam ads and banned goods.

What Next TBD is Slate's technology and power podcast, hosted by Lizzie O'Leary. Jeff Horwitz is a technology reporter at Reuters who obtained and reported on internal Meta documents. The episode begins with a common experience: opening Facebook or Instagram and encountering ads in which Elon Musk appears to be offering investment tips, giving away Teslas, or inviting personal one-on-one chats with fans. Horwitz explains that Meta's advertising systems are sophisticated enough to identify users who click on scam ads as good markets for more scam ads — effectively tagging them as responsive to fraud and serving them additional fraudulent content. Not all scam ads are obvious: Horwitz gives the example of a set of McCormick spices that appeared to be a legitimate holiday gift deal, where the hallmark of a sophisticated scam is that it does not look like one. Meta's internal projections, which Horwitz obtained, categorised 10% of total revenue as coming from violating ads, including high-risk financial investment scams, lower-risk scams, gambling, pornography, and dubious health supplements. This translated to roughly $7 billion per year in what the documents called the higher legal risk segment, and $16 billion for all violating ad categories combined. Horwitz notes he had suspected the number was non-trivial based on prior reporting about how lenient Meta was in enforcing ad policy, but confirms he was nonetheless surprised by the scale. The minimum threshold for ejecting an advertiser running a financial investment scam was eight verified strikes — a standard Horwitz presents as deliberately permissive. Scamming, he observes, is a business, and advertisers would not keep buying ads if they were not making several times their money on the return. The episode frames this as a structural economic choice embedded in Meta's ad business model.

As heard by us

Meta's ad auctions can still reward scam ads, even with penalties in place.

It lays out Meta's ad auction logic plainly: penalties can push down scam ads, but they do not erase every chance that one still wins, and Meta can still take in more money when that happens. The tension sits in the rules themselves, not in a dramatic twist.

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Why you'd press play

You want the scam-ad math, not just the outrage.

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