Facebook and Instagram advertisers filed a $7 billion class action lawsuit against Meta in San Francisco.
They claim the social media giant exaggerated ad viewing figures by up to 400%, leading them to pay inflated premiums for placing ads on its platforms.
Potential reach metric. Advertisers suing Meta allege that the potential reach metric used by the company to determine ad costs depends on the total number of social media accounts rather than individual users. They argue that this approach is problematic because it could include bot and fake accounts, causing advertisers to pay more money to have their ads served to bots.
What Meta says. Meta denied the allegations, explaining that the price advertisers are charged is based on performance metrics, not the potential reach metric as claimed in the lawsuit. A Meta spokesperson said AdWeek:
“These allegations are baseless, and we will vigorously defend ourselves.”
What advertisers are saying. Geoffrey Graber, partner at Cohen Milstein and lead counsel representing the advertisers, said:
“We look forward to continuing to litigate this case on behalf of Meta’s advertising customers and present the evidence to a jury that Meta knew of its inflated potential reach and refused to fix the problem due to revenue concerns.”
Why we care The lawsuit represents millions of advertisers who may have overpaid to run their ads on Instagram and Facebook. If this case goes to trial, more affected advertisers could come forward to claim compensation.
Legal data. Former Meta advertisers DZ Reserve and Cain Maxwell initiated the case in 2018. After the complaint was filed, DZ Reserve ceased operations with Meta and it is unknown if Maxwell’s business is still operational. of Appeals in San Francisco ruled that the company could take legal action against Meta for monetary damages.
next steps The case will either go to trial or be resolved through a settlement involving financial compensation for the plaintiffs.
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deep dive Read the court documents in full for more information.
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