Senator Elizabeth Warren is calling on the Justice Department and Securities and Exchange Commission to investigate whether Facebook violated wire fraud and securities laws by allegedly misstating ad metrics.
“Extensive documentation in the public record ... suggests that Facebook may have misled investors, the SEC, its advertising customers, and the public about the reach of its advertisements, a core aspect of Facebook’s business model,” the Democratic lawmaker from Massachusetts said Thursday in a letter to Attorney General Merrick Garland and Securities and Exchange Commission Chair Gary Gensler.
“Facebook is not above the law,” Warren adds. “The company’s executives cannot mislead investors, the SEC, its advertising customers, and the public about a core metric of its business model with impunity if such actions violate federal wire fraud or securities laws.”
Warren was referring to allegations that Facebook overestimated the potential reach of ad campaigns.
Those allegations -- which are also at the center of advertisers' class-action complaint against the company -- appear to have first surfaced in 2017, when the industry organization Video Advertising Bureau said Facebook's estimates of audience reach in every U.S. state were higher than the states' populations.
The advertisers who are suing Facebook alleged in court papers that company employees were aware of complaints about the potential reach metric as far back as September of 2015, but failed to respond appropriately.
Facebook has argued in that lawsuit that estimates about campaigns' reach are not guarantees, and don't affect billing.
Warren's letter came one day after Senator Maria Cantwell urged the Federal Trade Commission to investigate Facebook over statements regarding its ad metrics, as well as representations regarding its policies on “hate speech.”