Meta Platforms Inc. (NASDAQ:META) has come under scrutiny for reportedly running ads on Facebook and Instagram that direct users to online marketplaces for illegal drugs, even as it faces a federal investigation over the same issue.

What Happened: Meta has been reportedly profiting from ads that violate its own policies against promoting illicit or recreational drugs, The Wall Street Journal reported on Wednesday. The review found numerous ads selling illegal substances like cocaine and prescription opioids. Furthermore, an independent analysis by an industry watchdog group found hundreds of such ads over recent months.

These ads often display images of prescription drug bottles, piles of pills, or bricks of cocaine. One ad discovered in July encouraged users to "Place your orders," alongside a photo of a razorblade and a yellow powder arranged to spell out "DMT," a psychedelic drug.

Meta's artificial intelligence tools for content moderation have been unsuccessful in stopping these drug ads, which often redirect users to other platforms for purchases. The use of photos to display the drugs available appears to allow the ads to bypass Meta's content-moderation systems.

Users who click on the Facebook pages or Instagram accounts associated with these ads often find additional, nonsponsored photos or posts of drug-related content. The links in the ads typically lead users to private group chats on the app Telegram, which isn't owned by Meta.

Meta disabled many of the drug ads identified by the Journal within 48 hours of their publication, according to a company spokesman. All of the ads have now been removed for violating Meta's policies, and the users who created the ads have been banned from the platform.

There has been ongoing discussion among lawmakers about holding technology companies accountable for third-party posts on their platforms. However, efforts have been complicated by Section 230 of the Communications Decency Act, which generally exempts online platforms from liability for third-party posts.

Meta has yet to respond to the queries sent by Benzinga.

Why It Matters: This isn't the first time Meta has been linked to illicit drug sales. In March, U.S. prosecutors were investigating whether Meta's platforms were facilitating and profiting from the illegal sale of drugs.

This followed a June 2023 report about a surge in ads for weight-loss drugs on Facebook and Instagram. Meta's platform Threads was also found to be directing users to rehab help for cannabis and psychedelic use.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari