Rob Wiblin

More broadly, the documents show that managers overseeing anti-fraud efforts were told that they couldn't take any action that would cost Meta more than 0.1% of total revenue.

Meta says this wasn't a hard limit.

The math kind of speaks for itself.

If fraud accounts for roughly 10% of your revenue and your anti-fraud team is capped at affecting 0.15%, their hands are really pretty much tied.

There's not a lot that they're going to be able to do.

A particularly grim detail about this is that Meta's ad targeting algorithm naturally identifies people vulnerable to fraud, like the elderly or the desperate.

And if they click on one scam ad, it learns to feed them more and more until their feed is basically completely stuffed with them.

Now, this all sounds pretty outrageous.

Ameta's own documents suggest the company realized that it was legally exposed here.

They anticipated fines of up to a billion dollars for what they were doing.

But the documents show them doing a cold calculation.

A billion dollars in fines?

Okay.

But wait, we're making 3.5 billion dollars every six months from high-risk scam ads in the United States alone.

That figure, one document noted, almost certainly exceeds the cost of any regulatory settlement involving scam ads.

So those fines to Meta just became another cost of doing business.

Rather than voluntarily cracking down, the same document finds Meta's leadership deciding to act only if faced with impending regulatory action.

So what are the takeaways for policymakers?

First and most obviously, penalties have to scale with expected profits and the probability of catching a lawbreaker in the first place.

Meta could look at $1 billion in expected fines and shrug because they were just making so much more money from running the fraudulent ads.