Bid to curb scam ads targets Facebook and Instagram revenue
Two prominent U.S. senators have urged federal regulators to scrutinize how revenue is generated from deceptive advertisements on Facebook and Instagram. Senator Josh Hawley and Senator Richard Blumenthal sent letters to the chairs of the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC), requesting a joint inquiry into whether ads on the social platforms promote scams and the sale of banned goods.
The push comes amid ongoing concern that major social networks remain a conduit for misleading schemes, ranging from get-rich-quick schemes to the sale of illegal items. Hawley, a Republican from Missouri, and Blumenthal, a Democratic senator from Connecticut, emphasize that the scale and sophistication of these ad campaigns warrant closer scrutiny from the nation’s consumer watchdog and financial regulator.
Why the focus on ads and revenue models?
The senators argue that the revenue models of platforms like Facebook and Instagram may inadvertently incentivize the propagation of harmful advertisements. If platforms profit from engagement and ad impressions, there is a concern that poor quality or illegal promotions can thrive, especially when they target vulnerable users. Hawley and Blumenthal suggest that the combination of user data, ad targeting, and performance metrics could enable scams to scale rapidly.
In their letters, the lawmakers request the FTC and SEC to examine the platforms’ advertising policies, enforcement actions, and the adequacy of disclosures given to consumers. They also ask for data on the prevalence of banned goods being advertised and the steps taken to remove such listings or reduce exposure to users.
Regulatory landscape and potential steps forward
The FTC has long pursued cases against deceptive advertising and unfair business practices, while the SEC focuses on market integrity and investor protection. The senators’ appeal to both agencies signals an interest in a broader, cross-agency approach to online advertising that could intersect consumer protection, securities law, and even potential violations of anti-fraud provisions.
Possible outcomes of the inquiry could include enhanced platform accountability, more transparent ad labeling, stricter enforcement against prohibited products, and clearer penalties for repeat offenders. Regulators might also push for stronger verification processes for advertisers and more robust user-reporting mechanisms to flag suspicious activity quickly.
Tech platforms respond and broader implications
Facebook and Instagram—owned by Meta Platforms, Inc.—have repeatedly faced public and regulatory scrutiny over misinformation, data privacy, and ad integrity. In recent years, the companies have rolled out enforcement actions against advertisers who promote illegal or deceptive goods, while also investing in automated detection and human review teams. The lawmakers’ request for a joint inquiry could compel swifter action and more comprehensive reporting on progress and gaps in enforcement.
Consumer advocates have argued that stronger oversight benefits all users and helps restore trust in online marketplaces. Critics, however, warn that expansive regulatory scrutiny could slow innovation or burden legitimate advertisers who rely on digital advertising to reach customers. Hawley and Blumenthal’s letters stress protecting consumers while ensuring legitimate businesses maintain access to ad channels.
What comes next?
The FTC and SEC have not publicly commented on the request, but the situation underscores ongoing debates about how best to regulate digital advertising, protect consumers, and deter illicit activity on leading social platforms. As lawmakers consider new rules and potential reforms, stakeholders across technology, finance, and civil society will be watching closely for policy signals that could shape online advertising for years to come.
