Saying the optimal amount of fraud is nonzero is a way to avoid the question of what amount of fraud is reasonable. Is the optimal amount of fraud that Facebook facilitates really a multiple of the value stolen through burglaries?
With $62 billion in net income, the $16 billion made from crime is a quarter of their net income or a tenth of their revenue.
Actions you take to limit crimes inevitably also impact legitmate users as well and disrupt their ability to use the service legally.
While this might be true for some companies, if you mail around lists of the biggest fraudsters on your platform within your company and don’t do anything to stop them, you aren’t at that point. Banning people that you internally call the biggest fraudsters that make millions does very little to impact legitimate users.
Saying the optimal amount of fraud is nonzero is a way to avoid the question of what amount of fraud is reasonable.
I think the phrase is meant to suggest the need to look deeper into the tradeoffs and understand what exactly you’d like an actor to do more or less of rather than go off of high-level impressions.
I think the discussions around the numbers you quote illustrates this point. The $16 billion dollars comes from multiplying by a 10% number from Meta’s internal reports. This becomes 23% in one of the comments and 25% of net income in yours. I think it is valid and useful to discuss these types of numbers when trying to understand the phenomenon but it can be a bit risky when they are used too much for “vibes”. I feel like you are essentially going off vibes, and this is what the “optimal amount of fraud is non-zero” is meant to push against. Basically we shouldn’t have a knee jerk reaction to 10% of revenue or 25% of net income or whatever just because they sound bad on first glance. For example, Meta argues that the 10% of revenue is actually an overestimation:
In a statement, Meta spokesman Andy Stone said the documents seen by Reuters “present a selective view that distorts Meta’s approach to fraud and scams.” The company’s internal estimate that it would earn 10.1% of its 2024 revenue from scams and other prohibited ads was “rough and overly-inclusive,” Stone said. The company had later determined that the true number was lower, because the estimate included “many” legitimate ads as well, he said. He declined to provide an updated figure.
Is this reasonable or a greedy corporation trying to cover its ass? I feel like that way leads to vibes. People are going to react to that largely on how the feel about Meta or big tech or whatever.
While this might be true for some companies, if you mail around lists of the biggest fraudsters on your platform within your company and don’t do anything to stop them, you aren’t at that point. Banning people that you internally call the biggest fraudsters that make millions does very little to impact legitimate users.
Its unclear to me that Meta failed to ban any accounts they thought were obvious scammers and were still active on a given account. Can you quote a section of the article that leads you to believe this? It seems like Meta employees did discuss high risk ads, but I could imagine ways this is more complicated then vibes make it appear. For example, the report being cited seems to cover a period back to 2021. You could have examples of scams on the platform that are being discussed but that the scammers have since moved on from and are no longer active. I think this type of thing should be considered par for the course when dealing with criminal activity since criminals should be expected to do what they can to adapt and avoid attempts to ban or otherwise interfere with their operations. Thus moving quickly to the newest most effective scam is somewhat expected behavior.
If we look in detail at some of the potential actions Meta could take I think it becomes clear that concern for impact legitimate users would be reasonable:
Much of the fraud came from marketers acting suspiciously enough to be flagged by Meta’s internal warning systems. But the company only bans advertisers if its automated systems predict the marketers are at least 95% certain to be committing fraud, the documents show. If the company is less certain – but still believes the advertiser is a likely scammer – Meta charges higher ad rates as a penalty, according to the documents. The idea is to dissuade suspect advertisers from placing ads.
What is the potential downside of banning accounts on a lower threshold? The downside is that you potentially trade false negatives for false positives. In other words, you end up banning more legit advertisers by doing this.
The is critical of the fact that Meta employees discussed the issue of identifying scams as a business decision. One of the comments quoted:
“Let’s be cautious,” wrote the manager overseeing the effort, noting that the allowed revenue hit included both scam ads and “benign” ones that were mistakenly blocked. “We have specific revenue guardrails.”
This seems consisent with the concern about impacting legit users. People may differ in how much they believe this is the real motivation, but I think that gets us back into “vibes” territory.
Comparing the money made by meta to the amount of value stolen via burglaries is not a vibe based argument.
Some bigger spenders – known as “High Value Accounts” – could accrue more than 500 strikes without Meta shutting them down, other documents say.
Fraudulent ad campaigns can reach massive size: Four removed by Meta earlier this year were responsible for $67 million in monthly advertising revenue, a document reviewed by Reuters shows.
To draw attention to the company’s perceived failures, an employee earlier this year began issuing reports highlighting that week’s “Scammiest Scammer.” The report profiled whichever advertiser had earned the most user complaints about scams in the past week.
Colleagues praised the initiative. But being name-checked in the report wasn’t always enough for such accounts to get shut down.
The right action for ads that are more likely than not fraudulent is to put them in a queue to be reviewed by human moderators and probably tell the police about fraud attempts that human moderators consider to be relatively certain to be fraud.
When ten percent of their revenue is facilitating fraud than getting rid of those ten percent of their revenue hits “specific revenue guardrails” even when it doesn’t impact legitimate users at all. It’s quite obvious that removing 25% of the profits would result in some revenue guardrails being violated.
Increasing the price for fraudulent ads is a way to keep revenue high while reducing the amount of fraud.
The company’s internal estimate that it would earn 10.1% of its 2024 revenue from scams and other prohibited ads was “rough and overly-inclusive,” Stone said. [...] Is this reasonable or a greedy corporation trying to cover its ass?
If Meta would believe that the correct number is substantially lower in a way that would motivate people to be less angry, they would probably have shared with it, so what we take from that statement is that Meta believes that the correct number is so high that it’s embarrassing to them.
Generally, do you believe that if corporate accountants have the job to estimate a number that’s bad for the corporation and could possibly surface in lawsuits or government investigations are they more likely to over- or underestimate it?
I would also note that the corporate statement includes any sign of Meta investing resources. It does not say things like “Because we care about our users not getting scammed we spent 100 million on investigators to remove fraud from our platform.”
Comparing the money made by meta to the amount of value stolen via burglaries is not a vibe based argument.
I think it is, why are we comparing burglaries to digital crimes when the latter is likely far more common?
And the ads are not only fraud as the post alleges. It’s fraud and banned goods. The sale of the latter isn’t stringently prosecuted since in most cases it’s a victimless crime. It is quite easy to buy drugs illegally on the internet.
I think it is, why are we comparing burglaries to digital crimes when the latter is likely far more common?
Because Meta shares a huge responsibility for making the digital crimes easy to do. According to their own analysts their platforms are third of involved in a third of all successful scams in the U.S.
This isn’t just about ads but also about other communication, but it should be Meta’s responsibility to provide an environment for their users that doesn’t make them prime targets for crime.
Digital crime proliferation is a sign of big tech failing customers by not adequately protecting them.
Saying the optimal amount of fraud is nonzero is a way to avoid the question of what amount of fraud is reasonable. Is the optimal amount of fraud that Facebook facilitates really a multiple of the value stolen through burglaries?
With $62 billion in net income, the $16 billion made from crime is a quarter of their net income or a tenth of their revenue.
While this might be true for some companies, if you mail around lists of the biggest fraudsters on your platform within your company and don’t do anything to stop them, you aren’t at that point. Banning people that you internally call the biggest fraudsters that make millions does very little to impact legitimate users.
I think the phrase is meant to suggest the need to look deeper into the tradeoffs and understand what exactly you’d like an actor to do more or less of rather than go off of high-level impressions.
I think the discussions around the numbers you quote illustrates this point. The $16 billion dollars comes from multiplying by a 10% number from Meta’s internal reports. This becomes 23% in one of the comments and 25% of net income in yours. I think it is valid and useful to discuss these types of numbers when trying to understand the phenomenon but it can be a bit risky when they are used too much for “vibes”. I feel like you are essentially going off vibes, and this is what the “optimal amount of fraud is non-zero” is meant to push against. Basically we shouldn’t have a knee jerk reaction to 10% of revenue or 25% of net income or whatever just because they sound bad on first glance. For example, Meta argues that the 10% of revenue is actually an overestimation:
Is this reasonable or a greedy corporation trying to cover its ass? I feel like that way leads to vibes. People are going to react to that largely on how the feel about Meta or big tech or whatever.
Its unclear to me that Meta failed to ban any accounts they thought were obvious scammers and were still active on a given account. Can you quote a section of the article that leads you to believe this? It seems like Meta employees did discuss high risk ads, but I could imagine ways this is more complicated then vibes make it appear. For example, the report being cited seems to cover a period back to 2021. You could have examples of scams on the platform that are being discussed but that the scammers have since moved on from and are no longer active. I think this type of thing should be considered par for the course when dealing with criminal activity since criminals should be expected to do what they can to adapt and avoid attempts to ban or otherwise interfere with their operations. Thus moving quickly to the newest most effective scam is somewhat expected behavior.
If we look in detail at some of the potential actions Meta could take I think it becomes clear that concern for impact legitimate users would be reasonable:
What is the potential downside of banning accounts on a lower threshold? The downside is that you potentially trade false negatives for false positives. In other words, you end up banning more legit advertisers by doing this.
The is critical of the fact that Meta employees discussed the issue of identifying scams as a business decision. One of the comments quoted:
This seems consisent with the concern about impacting legit users. People may differ in how much they believe this is the real motivation, but I think that gets us back into “vibes” territory.
Comparing the money made by meta to the amount of value stolen via burglaries is not a vibe based argument.
The right action for ads that are more likely than not fraudulent is to put them in a queue to be reviewed by human moderators and probably tell the police about fraud attempts that human moderators consider to be relatively certain to be fraud.
When ten percent of their revenue is facilitating fraud than getting rid of those ten percent of their revenue hits “specific revenue guardrails” even when it doesn’t impact legitimate users at all. It’s quite obvious that removing 25% of the profits would result in some revenue guardrails being violated.
Increasing the price for fraudulent ads is a way to keep revenue high while reducing the amount of fraud.
If Meta would believe that the correct number is substantially lower in a way that would motivate people to be less angry, they would probably have shared with it, so what we take from that statement is that Meta believes that the correct number is so high that it’s embarrassing to them.
Generally, do you believe that if corporate accountants have the job to estimate a number that’s bad for the corporation and could possibly surface in lawsuits or government investigations are they more likely to over- or underestimate it?
I would also note that the corporate statement includes any sign of Meta investing resources. It does not say things like “Because we care about our users not getting scammed we spent 100 million on investigators to remove fraud from our platform.”
I think it is, why are we comparing burglaries to digital crimes when the latter is likely far more common?
And the ads are not only fraud as the post alleges. It’s fraud and banned goods. The sale of the latter isn’t stringently prosecuted since in most cases it’s a victimless crime. It is quite easy to buy drugs illegally on the internet.
Because Meta shares a huge responsibility for making the digital crimes easy to do. According to their own analysts their platforms are third of involved in a third of all successful scams in the U.S.
This isn’t just about ads but also about other communication, but it should be Meta’s responsibility to provide an environment for their users that doesn’t make them prime targets for crime.
Digital crime proliferation is a sign of big tech failing customers by not adequately protecting them.